# Comment letter **Re:** Prediction Markets; Public Interest Determinations, RIN 3038-AF65 **To:** Commodity Futures Trading Commission Quotient submits this comment on the Commission's notice of proposed rulemaking concerning event contracts involving enumerated activities. We support the Commission's effort to give venues a clearer framework for contracts involving war, terrorism, assassination, gaming, and unlawful activity. Our comment focuses on one practical question. How would the proposed rule apply to actual geopolitics event contracts? We read every active geopolitics market on Polymarket as of June 15, 2026, comprising 879 contracts with $633.4M in cumulative volume, and classified each contract by the event that makes it pay. We used Polymarket as the evidence base because it provides a large live catalog of the types of contracts a CFTC-registered venue may seek to list. The legal question, however, is what a CFTC-registered venue could list under the proposed rule. The data show that the proposal reaches a small share of markets but a large share of volume. Under the narrow reading, 738 of 879 markets, or 84.0 percent, are listable as written. Under the broad reading, 542 markets, or 61.7 percent, are listable as written. By volume, the listable share falls from 51.6 percent under the narrow reading to 31.3 percent under the broad reading. The difference arises because several of the largest books sit in categories the proposed rule may reach. The cleanest part of the proposal is the direct-attack markets. We identify 118 markets and $125.5M of volume that pay on attacks, invasions, blockades, military entries into contested territory, or named killings. These contracts are the highest-risk under both the narrow and broad readings, and they match the Commission's central concern. Our requested clarifications preserve the Commission's ability to reach that core. The harder question is the middle. We identify $128.5M of volume across 196 markets whose status changes between the narrow and broad readings. That ambiguous band is concentrated in leader and regime survival ($74.5M), ceasefire and peace deal markets ($23.9M), territorial and facility control ($21.4M), and direct-attack edge cases ($8.6M). These are the categories where the proposed rule would benefit most from clarification. We also identify 133 markets and $103.6M of volume that are redraftable under the broad reading. These markets may be reachable through an enumerated pathway, but narrower terms could exclude that pathway while preserving the underlying forecast. Leader-tenure contracts are the clearest example. A contract asking whether a leader leaves office can be reached by assassination unless the terms exclude that path. A contract that resolves only through election, resignation, constitutional removal, negotiated exit, official administrative act, final court judgment, or natural death can preserve the forecast while avoiding the enumerated pathway. We respectfully ask the Commission to clarify four points. **1. Publish safe-harbor language for redraftable contracts** The Commission should provide model language for contracts whose outcome can occur through both enumerated and non-enumerated mechanisms. A workable form appears below. > This market resolves yes only if the outcome occurs by reason of one or more of the following: [electoral defeat, resignation, constitutional removal, legislative or regulatory action, final court judgment, negotiated agreement, official administrative act, or natural death]. It resolves no if the outcome occurs through any other means. For the avoidance of doubt, an outcome arising from assassination, terrorism, war, or other belligerent or organized violent activity will not cause this market to resolve yes. This clarification would let venues preserve useful forecasting markets while excluding the pathways the proposed rule is meant to scrutinize. Model wording works by taking a contract out of the rule's scope entirely. A contract whose terms exclude resolution through an act of war, terrorism, or assassination does not involve those activities within the meaning of the rule, so the public-interest determination never reaches it. For contracts that remain in scope, we recognize that the public-interest standard leaves the listing outcome to case-by-case Commission judgment. **2. Define the line for diplomatic-status markets** The Commission should distinguish contracts that settle on acts of war from contracts that settle on diplomatic agreements. A ceasefire or peace deal market can sit near the boundary because its subject is the cessation of hostilities. Markets on pledges, normalization, recognition, trade, disarmament, or similar agreements settle on diplomatic acts. A war may be the background reason for an agreement without being the settlement-determining occurrence. **3. Separate violent acts from measurements and status determinations** The Commission should distinguish a contract that settles on an attack from one that settles on a price, count, official act, or status measurement affected by conflict. The Strait of Hormuz transit example illustrates the point. A contract that settles on a published shipping count is a measurement contract, even if conflict affects the count. Territorial-control markets raise a similar drafting question. A contract that pays on a military operation is different from one that pays on who administers territory, especially where the latter can be redrafted to exclude violent transfer. Across these points, the same principle controls. The rule should apply to the settlement-determining occurrence rather than the background cause. War, terrorism, or assassination may explain why an outcome happens. That does not mean every contract affected by those conditions settles on an enumerated activity. **4. Publish the criteria for the public-interest determination** Publish the criteria the Commission will apply when making the public-interest determination for contracts that remain in scope. Venues can draft to a clear scope line. They cannot draft to an unpredictable discretionary review. Stating the factors that weigh for and against listing gives venues the same certainty on the second step that model wording gives them on the first. Finally, the timing of the current market stock supports a drafting-focused approach. Of the $435.2M in-scope volume under the broad reading, 35 percent resolves by the July 27, 2026, comment deadline, and 99.7 percent resolves by the end of 2026. A final rule would likely bind in 2027 or later. The rule's durable effect will therefore be on the forward flow of new listings. Safe-harbor drafting language is the highest-leverage clarification because it will shape future contracts before they are listed. Quotient would be pleased to provide the Commission with the supporting report, row-level classification, seven-ruling rulebook, and validation materials. Those materials apply the proposed test at scale and show where the rule is clear, where it is ambiguous, and where venue drafting can resolve the ambiguity. Respectfully submitted, Shira Stember and Jordan Olmstead Co-Founders, Quotient jordan@quotient.social **Exhibits to attach or reference** - Exhibit A. Full report, *What US Regulation Would Mean for Prediction Markets*. https://www.quotient.social/reports/cftc-prediction-markets - Exhibit B. Row-level classification dataset, 879 markets. - Exhibit C. Classification rulebook, seven rulings. - Exhibit D. Validation methodology and results.