CFTC Proposes 45-Day Rule to Bar War and Terror Prediction Contracts
Updated
Updated · CNBC · Jun 10
CFTC Proposes 45-Day Rule to Bar War and Terror Prediction Contracts
3 articles · Updated · CNBC · Jun 10
Summary
A 45-day public comment period opened after the CFTC proposed its first federal framework for prediction markets, targeting contracts tied to terrorism, assassinations, war and other conduct deemed against the public interest.
The rule sets a three-step test: determine whether a product is an event contract, whether it falls under Commodity Exchange Act categories, and whether a public-interest review warrants a ban.
Sports contracts were not broadly outlawed, but the proposal would prohibit pure-chance games and high-risk sports-adjacent markets such as injuries, officiating-only events, discrete actions, altercations and pre-collegiate contests.
Prediction markets have surged over the past year, drawing state challenges over sports-related offerings, while the CFTC maintains all such contracts are swaps under its exclusive authority and Congress has raised insider-trading concerns.
As federal regulators clash with states, who will ultimately decide the future of online prediction markets in America?
With new U.S. rules looming, will unregulated offshore markets become the new havens for insider trading?
CFTC’s $1 Billion Clampdown: The Coming Ban and the Battle Over Prediction Markets in 2026
Overview
The Commodity Futures Trading Commission (CFTC) is preparing to introduce major new rules for prediction markets, especially those offering contracts on sports events, with changes expected by June 2026. This move is driven by growing concerns about the impact of these markets on traditional, state-regulated sports betting and ongoing debates about their legality. The American Gaming Association (AGA) has played a key role in pushing for stricter oversight, highlighting significant tax revenue losses to draw public and regulatory attention. As a result, the CFTC is responding with enhanced regulations to address these concerns and ensure proper market oversight.