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

According to informed sources, 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 seeking to avoid obvious manipulation.

According to a copy of the proposed rules seen by the Wall Street Journal, the U.S. CFTC will propose new regulations on Wednesday, seeking to block prediction bets that it deems 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 instead outlines 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 taken proactive steps.

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