CFTC Proposes New Rules Defining Prediction Markets and Gambling

CFTC prediction markets — The U.S. Commodity Futures Trading Commission (CFTC) has proposed new rules to clarify the distinction between regulated prediction markets and illegal gambling, asserting its exclusive jurisdiction over event-based derivatives.

The proposed rule would explicitly classify event contracts tied to sports, politics, culture, and weather as “swaps,” bringing them under the CFTC’s regulatory purview. Simultaneously, the agency issued an interim final rule that excludes casino-style gambling from its definition of a swap, aiming to draw a clear legal boundary.

This move sharpens the CFTC’s long-standing claim to exclusive jurisdiction over such markets, potentially impacting crypto-based prediction platforms. The rules are designed to provide legal certainty for markets that allow hedging or price discovery, while explicitly prohibiting gambling activities.

The CFTC’s action comes as part of its ongoing effort to define its regulatory scope in evolving financial markets, including those utilizing blockchain technology. The proposal is now open for public comment before potential finalization.