CFTC to propose new prediction market rules, WSJ reports

Investing.com -- The U.S. Commodity Futures Trading Commission will propose new rules governing prediction markets, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.

Prediction markets allow traders to bet on "yes or no" outcomes on specific events and have grown in both popularity and controversy.

The markets have drawn increasing scrutiny as well-timed trades ahead of U.S. President Donald Trump's major policy surprises have potentially led to millions of dollars in profits for unknown traders.

According to the WSJ report, the rules could cover some sports-related trading, including bets on player injuries and first-pitch gambling. Bets on war, terrorism or assassinations would likely be barred as not in the public interest.

The agency's proposal does not outright ban trading on any specific types of event contracts. Instead, it outlines factors that regulators will use to review certain types of contracts on a case-by-case basis, the Journal added.

U.S. President Donald Trump said last month in a post on Truth Social that it was critically important that the Commodity Futures Trading Commission maintain exclusive authority over prediction markets.

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