CFTC Proposes New Rules for Event Contracts on Prediction Markets

Short summary

The CFTC issued a new regulatory framework for prediction market event contracts with a three-step test for permissibility, clarifying rules around sports contracts, national security, and gaming definitions. Broad sports outcome contracts are permitted; terrorism and war contracts are prohibited. The 90-day review timeline provides certainty for the $25B+ prediction market ecosystem.

• •Three-step test determines legality: excluded commodity → involved enumerated activity → public interest analysis
• •Sports contracts on objective league data approved; terrorism/war/assassination prohibited; political elections and awards explicitly excluded from 'gaming' definition
• •90-day review process with extensions at platform request; regulatory clarity enables rapid platform growth

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