Comment on Proposed Rule — Prediction Markets; Public Interest Determinations (RIN 3038-AF65; 91 FR 35806)

Summary

Brierly is an independent ratings and research firm for event markets. We publish settlement-risk grades on live Kalshi and Polymarket contracts under a public, reproducible methodology, and we maintain what we believe is the only coded database of event-market settlement disputes. We write in support of the Commission's effort to bring a public-interest-determination framework to listed event contracts, and to make one narrow, evidence-based point: the variable that best predicts a contested settlement is resolvability — whether a contract names a canonical source, defines its terms, and fixes its clock — not the subject the contract is about.

We propose that public-interest determinations reference, for each contract family, an independent, methodology-public, reproducible settlement-risk assessment against a published rubric. The five safeguards we describe below are the same ones our rubric scores; they are drafting requirements, not editorial judgments, and they can be checked by anyone.

The empirical record

Our comment is grounded in a coded dataset, not in anecdote. As of June 11, 2026 it contains 21 coded 2025–26 settlement disputes across both major venues, carrying $1.1B+ in de-duplicated reported volume, every case sourced and dated. Each case is classified into one of five recurring failure modes; the distribution is dominated by two:

• Definitional vagueness — an undefined operative term (“suit”, $237M; “ban”, $120M; “invasion”, $10.5M; a punctuation reading).
• Source dependence — settlement keyed to press coverage or to a confirmation that never came (the Iran ceasefire dual-confirmation, $203.6M; a televised meeting that two designated outlets didn't report).
• Disclosure timing — event-time versus disclosure-time (an 8-K filed one day after a midnight cutoff, ~$85M).
• Scalar carve-out — a revision-prone figure with no controlling-print rule (a first viewership print that a later revision crossed).
• Oracle adjudication — a token-weighted vote or a discretionary clarification deciding the outcome (a governance attack that moved a market 9% to 100% in a day).

The independent press has reached the same conclusion from the other direction: The Defiant counted 1,150+ Polymarket markets disputed year-to-date as of June 1, 2026, and the Wall Street Journal reported that the top ten oracle wallets cast more than half the votes in the most disputed markets, with roughly one in five disputes involving a financially interested voter. The pattern is not noise; it is a property of how the contracts are written and adjudicated.

Resolvability, not subject matter, is the operative variable

The proposed rule would permit sports outcome contracts while disallowing single-play props, injury markets, officiating-call markets, pre-collegiate markets, and pure-luck games. We read that line as tracking the right thing for the wrong stated reason. What those disallowed families share is not “sport” — it is low resolvability: a discrete, fast, judgment-laden event with no canonical record, where reasonable parties will read the result differently. An outcome contract (“who won the tournament”) settles on a governing body's published, near-canonical result; a play-level prop (“will there be a penalty”) settles on a contested in-the-moment judgment.

The same low-resolvability signature appears well outside sport. A market on whether a public figure “mentioned” a word turns on a muted feed or a homograph; a market on whether a “ceasefire” holds turns on which government is treated as authoritative; a market on an “invasion” turns on an undefined threshold of control. These are the most-disputed families in our record, and none of them is a sports contract. A public-interest test keyed to resolvability — does the contract name a source, define its terms, fix its clock — would capture the disallowed sports families and the analogous non-sports families with one consistent principle, and would let genuinely resolvable contracts list regardless of subject.

A reproducible standard the Commission, the venue, and the public can each check

We propose that a public-interest determination reference, for each contract family, an independent settlement-risk assessment produced against a published methodology, computed deterministically, and reproducible from the contract text — so the same input yields the same grade for the Commission, the listing venue, and any member of the public who re-runs it. Reproducibility is the point: a settlement-risk assessment that cannot be independently re-derived is an opinion; one that is deterministic and hash-stamped is a check.

Brierly's own rubric is structured exactly this way and is public on our methodology page; we offer it as one worked example of the form such a standard could take, not as the only possible one. The aim is a standard, openly specified, that any qualified independent assessor could apply.

The five safeguards

Concretely, we argue a settlement-integrity standard should require that each listed contract demonstrate the following. Each maps to a documented failure mode in the record and is a drafting requirement a reviewer can verify on the face of the rules text:

• A named, primary resolution source — an official record, not “credible reporting” or dual-party confirmation.
• An explicit definition of every operative term in the contract, for the purposes of that contract.
• A designated timezone and a stated clock (event-time vs. disclosure-time), with a hard cutoff.
• Boundary, rounding, and controlling-print rules for any numeric threshold.
• Tie / cancellation handling and a structured, time-boxed dispute window — not unilateral discretion or retroactive clarification.

These are not novel inventions; they are the safeguards whose absence produced every nine-figure dispute in the coded record. Requiring them raises the resolvability floor without prescribing which contracts may list.

Why an independent assessor

A venue grading its own listings is structurally conflicted: it wrote the language it would be grading, and it has listings to defend. That is not an accusation of bad faith; it is the same structural reason securities issuers do not audit their own books. Independent verification is what lets the next, more conservative pool of capital — and a regulator — rely on the result. The order-flow surveillance layer (firms like Solidus and Eventus) and the contract-grading layer are complements; only the second can credibly come from a party with no contracts of its own to list.

About Brierly

Brierly is an independent ratings and research firm for event markets. Its grades, datasets, and research are published under the firm's name, with the methodology, sources, and a public, Brier-scored track record attached, so the work is checkable on its merits. We have no listings, take no position on the outcome of any contract, and accept no payment from any venue to preview or alter a grade. Correspondence: founders@brierlyresearch.com.