CFTC Proposes Broad Rules to Regulate Prediction Markets, Allowing Most Sports Betting

The U.S. Commodity Futures Trading Commission (CFTC) is proposing a broad set of new rules to regulate prediction markets, with parameters that would continue to allow most sports-related betting while seeking to prevent clear manipulation. According to Odaily, a draft of the proposed rule reviewed by The Wall Street Journal says the CFTC plans to introduce the rules on Wednesday and aims to block predictive wagers it considers not in the public interest or highly susceptible to manipulation, such as cases where an individual could have outsized influence over an outcome. The proposal does not directly ban trading in any specific type of so-called event contract. Instead, it outlines factors the regulator would use to review certain types of contracts on a case-by-case basis. The CFTC has previously provided preliminary guidance on which types of betting should be avoided, and Kalshi and other prediction platforms have taken steps in advance. People familiar with the matter said the CFTC is also considering additional rules, including measures intended to protect retail traders.