Regulators' proposed prediction markets rules ban trading on terrorism, assassinations
The proposed rules from the commission will now face a public comment period.
TL;DR
- Federal regulators, led by the CFTC, have proposed new rules for prediction markets.
- The rules aim to establish a framework for determining if contracts are illegal, particularly those related to terrorism, assassinations, and war.
- The CFTC will not outright ban all event contracts based on category but will scrutinize them based on public interest.
- The proposed rule outlines a process for prohibiting contracts: event determination, category check, and public interest analysis.
- The CFTC acknowledges the proposed rules are preliminary and may evolve with further rulemaking.
- The proposed rule includes specific details on sports-related contracts, permitting those settled on aggregate outcomes with objective data but prohibiting pure-chance games and high-risk designs.
- Contracts related to elections are determined not to be gaming as they are not for recreation or entertainment.
- The proposal will undergo a 45-day public comment period.
- CFTC Chairman Michael Selig stated the goal is to protect market integrity while allowing responsible innovation.