Regulating Information: Are Prediction Markets Navigating a Path Already Mapped by Sports Betting?

Explore the new regulatory frameworks for prediction markets as experts debate whether they are repeating the history of sports betting integrity rules.

By: AXL Media

Published: Apr 25, 2026, 9:09 AM EDT

Source: Information for this report was sourced from iGB (iGaming Business)

The Evolving Taxonomy of Market Intelligence

As prediction markets gain mainstream traction, the regulatory conversation has shifted toward codifying the ethics of informational asymmetry. Elie Mishory, a senior advisor to the US Securities and Exchange Commission, recently introduced a framework aimed at defining which types of informational advantages should be considered legally benign and which constitute market abuse. Mishory’s approach moves away from simply investigating individuals connected to an event, focusing instead on the nature and acquisition of the information itself to determine market integrity.

Defining the Four Tiers of Information Advantage

Mishory’s proposal categorizes market intelligence into four distinct levels to assist the Commodity Futures Trading Commission (CFTC) in its rulemaking. The framework distinguishes between the unlawful use of stolen data, "non-public own information" held by direct participants, third-party relationship-based data, and skill-based analysis. Under this structure, the use of personal research and skill would be explicitly protected, while the monetization of stolen or unlawfully appropriated facts would be strictly prohibited to prevent the rewarding of disloyalty and breach.

The Challenge of Participant-Driven Data

One of the more controversial aspects of the proposed framework is the treatment of "non-public own information." Mishory asserts that direct participants in an event should generally be permitted to trade, likening the practice to corporate executives trading their own company's stock. He argues that the presence of participants with direct knowledge is a fundamental part of market architecture rather than an exotic distortion. This perspective suggests that unless a trader has the direct power to manipulate the outcome, their inherent knowledge should not necessarily bar them from the exchange.