The U.S. CFTC is proposing to establish a new set of regulations to govern prediction markets and prevent obvious manipulation

According to informed sources, the CFTC is proposing a comprehensive set of new rules to regulate prediction markets. The parameters of these rules will continue to allow most sports-related betting while striving to avoid obvious manipulation.

According to a draft of the proposed rules seen by The Wall Street Journal, the U.S. CFTC will introduce new regulations on Wednesday, seeking to prevent predictive bets that it believes are not in the public interest or are easily manipulable, such as in cases where one person may have an undue influence on the outcome.

The agency's proposal does not directly prohibit trading any specific type of so-called event contracts but outlines the factors under which regulators will review certain types of contracts on a case-by-case basis.

The U.S. CFTC has previously provided some preliminary guidance on which types of bets should be avoided, and Kalshi and other prediction platforms have taken action in advance.

Additionally, informed sources revealed that the CFTC is considering other rules, including those aimed at protecting retail traders.