CFTC draft allows sports betting, bans violent event wagers

Federal regulators have unveiled a proposal to establish the first comprehensive national rulebook for online prediction markets, a move that would permit sports-related betting under federal oversight while banning wagers on violent events like wars, terrorism, and assassinations. The Commodity Futures Trading Commission's draft framework, released on June 10, aims to bring clarity to a rapidly growing but legally contested sector.

The proposal would rescind a 2024 ban that treated sports event contracts as gambling. Instead, it would allow most sports-related contracts to operate under federal commodity law, provided they meet standards for transparency, liquidity, and manipulation prevention. The rules define operator responsibilities, set fraud standards, and require surveillance systems and reporting mechanisms.

A central feature of the plan is a prohibition on contracts tied to events deemed highly susceptible to insider trading or against the public interest. This includes wagers on armed conflicts, terror attacks, and assassinations. Regulators also aim to ban bets on specific, minor events within a game that could be subject to manipulation, such as spot-fixing related...