CFTC is proposing a new set of rules to regulate prediction markets and avoid obvious manipulation

Odaily reported that according to sources familiar with the matter, the CFTC is proposing a broad set of new rules to regulate prediction markets. The parameters of these rules will continue to allow most sports-related betting while striving to avoid obvious manipulation.

According to a copy of the proposed rule seen by the Wall Street Journal, the U.S. CFTC will propose new regulations on Wednesday seeking to block prediction bets deemed not in the public interest or highly susceptible to manipulation, such as in situations where an individual could have an outsized influence on the outcome.

The agency's proposal does not directly prohibit trading any specific type of so-called event contracts, but rather outlines the factors regulators will use to review certain types of contracts on a case-by-case basis.

The U.S. CFTC has previously provided some initial guidance on which types of bets should be avoided, and Kalshi and other prediction platforms have already taken proactive steps.

Additionally, sources familiar with the matter revealed that the CFTC is considering other rules, including those aimed at protecting retail traders. (WSJ)