Prediction markets are finding early adopters in capital markets across brokers, exchanges, market makers, and infrastructure providers. Activity is most visible on the sell side, where firms are building access points, data services, venue capacity, and liquidity provision. Tradeweb’s partnership and minority investment in Kalshi, Robinhood’s build-out of Rothera Exchange & Clearing with Susquehanna International Group, and CME Group’s continued expansion of listed event contracts all point to expansion into capital-markets infrastructure, while established exchange groups such as Cboe and Nasdaq are starting to test adjacent prediction-style products. On the buy-side, research by Coalition Greenwich indicates prediction markets being evaluated for data, pricing signals, and event-risk insight to support research and tactical hedging use cases.
The regulatory landscape is still evolving, with some jurisdictions still deciding whether these contracts should be classified as gaming products or derivatives. The CFTC has asserted clearer federal oversight in the United States, but the perimeter remains unclear as Federal oversight is colliding with state gaming regulators.In the UK, the Gambling Commission has indicated that public prediction-market offerings would more likely fall within gambling law than the FCA-regulated financial regime for contracts for differences and spread betting.
RegTech Insight recently spoke with Lisa Balter Saacks, President of Trillium Surveyor, about their response to prediction markets. She noted that the firm is already surveilling activity in the sector— “We are live in prediction markets, meaning if you work with Trillium Surveyor, you can get surveillance monitoring to help narrow your risk,” adding that “we have players including large-scale broker-dealers actively including prediction contracts on their platforms.”
Surveyor is positioning its prediction markets coverage as an extension of existing trade surveillance controls offering firms “a clear path to extend existing oversight into event-driven trading” and describing the coverage as “built with input from early market participants.” That framing fits the need for early adopters to adapt existing surveillance disciplines to a more volatile, event-driven market structure.For compliance teams, the central issue is not only how prediction markets are classified, but whether firms can show regulators that surveillance and governance controls are keeping pace with adoption. Balter Saacks made that point directly, “It will be increasingly important for your e-comms and your trade surveillance to work together seamlessly – firms that bring those two capabilities into alignment will be well-positioned as expectations evolve,” she says.
As institutional activity grows, firms will need to demonstrate how they connect trading activity to voice and electronic communications for behavioural context and workflow evidence. The challenge is about whether firms can evidence a coherent process for investigation, escalation and review in a market that is still taking shape.
Balter Saacks was similarly cautious on artificial intelligence—“When it comes to trade surveillance and managing risk, if you’re speaking to someone and they say, ‘oh, we’ve deployed agentic AI and we absolutely do it,’ I’d be really nervous,” she says. Artificial intelligence may support workflow, summarisation, and communications analysis, but not yet as a substitute for controlled surveillance logic and human review.
Operational Impacts
Balter Saacks highlighted that “prediction markets, like overnight trading, create an always-on environment that the rest of the market still has to catch up with operationally. Referring to post-trade and market infrastructure, she noted that “many of these large, established institutions can’t flip on a dime,” noting that prediction markets are more than a surveillance problem, but rather a wider market-structure challenge in which controls, infrastructure and operating models are all having to adjust at the same time.Prediction markets have an established foothold in capital markets. The challenge now is supporting adoption with surveillance, governance and operational controls that can withstand high frequency events and stand up regulatory scrutiny whilst regulatory and market structures continue to evolve. In that context, Trillium Surveyor is positioning itself as a proven surveillance provider already live in the market, extending established controls, calibrated alerting, and capital-markets expertise into a new event-driven trading environment.
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