CFTC Proposes Prediction Market Rules Favoring Sports Contracts

The US Commodity Futures Trading Commission has proposed new rules for prediction markets that signal sports event contracts are generally not contrary to the public interest, even though federal law classifies them as 'gaming.' The draft, released Wednesday, 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 are unlikely to meet the public interest test. The proposal also clarifies that election contracts are not considered 'gaming' under the relevant federal laws, a shift Reuters suggested could ease regulatory uncertainty for platforms such as Kalshi and Polymarket, which gained prominence during the 2024 US presidential election.

The draft rules are open for public comment for 45 days and could help define the future regulatory framework for US prediction markets.

United States

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