Key facts
- The CFTC proposed new rules for prediction markets, aiming to allow sports betting while restricting wagers on sensitive events.
- Wagers on outcomes involving war, assassination, or player injuries would be banned.
- Markets on aggregate sports outcomes are generally considered permissible.
- Elections wagers are classified as contests, not gaming, and are not subject to a 90-day review period.
- The proposal follows industry growth and legal challenges from states and tribes.
- The rules will undergo a 45-day public comment period.
The Commodity Futures Trading Commission (CFTC) has unveiled proposed regulations for the prediction market industry, seeking to establish federal oversight and address risks of fraud. The draft rules would permit wagers on sporting events and games of chance, classifying them as permissible if they serve price discovery functions. However, the proposal outlines restrictions on certain sports-related bets, such as those concerning player injuries, officiating, or encouraging cheating. Wagers on outcomes involving war, assassination, or the ouster of foreign leaders would be prohibited.