CFTC seeks ban on markets tied to war or assassination

The Commodity Futures Trading Commission on Wednesday released a 267-page proposal that would ban prediction markets tied to war or assassination and restrict certain sports wagers. The proposal opens a 45-day public comment period.

Under the draft, markets that hinge on a political leader’s removal would be barred if the possible path includes war or assassination unless the market makes clear it will resolve only to non-violent outcomes such as electoral defeat, resignation, constitutional removal, negotiated departure or natural death.

The proposal targets platforms that have listed wagers framed around when specific leaders will be “out of office.” One open market on a prediction platform has drawn more than $14 million in trading on who will lead Iran by the end of 2026. A separate market on another platform has about $1.6 million in volume tracking whether an exiled political figure will take power by year-end.

The draft also would bar sports event contracts on individual player injuries, referee decisions, discrete plays or fouls, and physical altercations between players. The draft rule states that event contracts involving aggregate outcomes can be operated consistent with the public interest.

States and some lawmakers have pressed for state-level regulation of prediction markets and filed lawsuits challenging the CFTC’s view that federal oversight should be exclusive. The legal dispute could reach the U.S. Supreme Court.

The proposal allows industry participants, state regulators and the public to submit comments during the 45-day window. After the comment period the commission may revise the text before voting on a final rule. President Donald Trump urged federal control over prediction markets and called for the CFTC’s exclusive authority to be maintained on his social media platform.