The proposed rules would preserve election markets and allow many sports-based prediction contracts while limiting bets that could encourage manipulation.
The US Commodity Futures Trading Commission (CFTC) has proposed new rules for prediction markets, signaling that sports event contracts are generally not contrary to the public interest even though federal law classifies them as “gaming.”
Released on Wednesday, the proposal distinguishes sports event contracts from games of pure chance, saying markets based on final scores and win-loss records can aid price discovery. Contracts tied to player injuries, officiating decisions or other outcomes that could encourage manipulation, however, are unlikely to meet the public interest test.
The proposal also clarifies that election contracts are not considered “gaming” under the relevant federal laws. Reuters reported this could further ease regulatory uncertainty for platforms such as Kalshi and Polymarket, which rose to prominence during the 2024 US presidential election as traders increasingly turned to prediction markets to gauge the race’s outcome.
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