CFTC Proposes Rule Change to Include Prediction Markets

The Commodity Futures Trading Commission (CFTC) has proposed a rule change that would expand the definition of "swaps" to include event contracts traded on prediction markets. This proposed change, announced by the federal agency, would bring contracts based on the outcomes of sporting, political, cultural, and weather-related events under the purview of the CFTC's regulatory framework.

The move signals a potential shift in how these types of markets are overseen. Prediction markets, where participants trade contracts whose payouts depend on the occurrence or non-occurrence of specific future events, have gained traction in recent years. The CFTC's proposal aims to clarify the regulatory status of these contracts and the platforms that host them.