Prediction Markets’ Wild West Days May Be Over: CFTC Drafts Its First Major Framework
The CFTC released its first proposed framework for regulating prediction markets in the U.S. The draft would treat sports wagers and games of chance as “gaming,” but suggests some sports-related contracts may be allowed if they serve price discovery and public-interest purposes. It draws clearer lines against bets on player injuries, fighting, children’s sports, officiating, or any market that could encourage cheating. Election contracts are treated as “contests, not gaming,” putting them outside the agency’s 90-day review category for event contracts. The proposal also outlines how the CFTC would evaluate contracts tied to terrorism, war, assassinations, and similar sensitive topics. The agency called the framework preliminary and thin, and opened a 45-day comment period before possible further rulemaking.
