CFTC proposes framework favoring sports event contracts over gambling
The CFTC proposed new prediction-market rules that would treat many sports event contracts as generally consistent with the public interest, even though federal law can classify them as “gaming.” The draft draws a distinction between contracts based on final scores, win-loss records, or season statistics, which may support price discovery, and contracts tied to player injuries, officiating, or other outcomes more prone to manipulation, which are less likely to qualify. The proposal also says election contracts are not “gaming” under the relevant laws, reducing uncertainty for platforms like Kalshi and Polymarket. The rules are open for public comment for 45 days and could shape the US regulatory framework for prediction markets. As interest grows, these markets are attracting more institutional adoption and partnerships with financial and media firms.
