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 comprehensive new set of 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 rules seen by the Wall Street Journal, the U.S. CFTC will introduce new regulations on Wednesday, seeking to block predictive bets deemed not in the public interest or highly susceptible to manipulation, such as in cases where an individual may have excessive influence over an outcome.

The agency's proposal does not directly ban 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 preliminary guidance on which types of bets should be avoided, and Kalshi along with 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)