The CFTC is “seeking the ability to block prediction wagers it finds aren’t in the public interest or that seem highly susceptible to manipulation.” The rules would “likely limit certain types of sports-related trading such as bets on player injuries and so-called first-pitch gambling.” The CFTC had “already offered some preliminary guidance on what types of betting should be avoided,” and Kalshi and other prediction market platforms have “moved to get ahead of the new regulations” (WALL STREET JOURNAL, 6/10).
The proposed framework released on Wednesday would “leave the door open for most but not all sports-related trades,” which have driven massive profits for prediction markets. The CFTC states that each event contract “would be reviewed individually,” though it outlines “several sports-related examples that are likely ‘to be found to be contrary to the public interest’ and therefore prohibited” (ESPN.com, 6/10).
