CFTC proposes limits on prediction markets tied to terror, war
What's next: The proposal enters a 45-day public comment period as regulators face pressure over sports and election contracts.
The Commodity Futures Trading Commission proposed its first federal framework for policing prediction markets, laying out how it would block event contracts tied to terrorism, assassinations, war, gaming or other illegal conduct. The draft rule does not impose a blanket ban on sports or election contracts, but it gives the agency a process to decide whether a market violates the Commodity Exchange Act or the public interest. The move comes as prediction markets have surged and drawn scrutiny from states, which argue some sports contracts amount to betting under their authority. The CFTC says such contracts fall under its swaps jurisdiction. The proposal now heads into a 45-day public comment period.