CFTC Releases First Prediction Markets Rules: Terrorism and Assassination Bets Banned

Federal regulators have taken their first major step toward regulating prediction markets. On June 10, 2026, the Commodity Futures Trading Commission (CFTC) released a proposed rule that would ban contracts tied to terrorism, assassinations, and war.

The proposal is the agency’s first formal effort to create clear rules for the growing prediction markets industry, which allows people to trade contracts based on the outcome of future events.

The CFTC Takes Action

Until now, the CFTC has largely allowed prediction markets to grow without a specific set of rules. The new proposal changes that by outlining what types of event contracts may be allowed and which ones will not be permitted.

Prediction markets have become more popular in recent years. Users can trade contracts on topics ranging from elections to economic data. Because these products fall under the CFTC’s authority, the agency is now moving to establish clearer oversight.

The proposal is also important for the U.S. gambling industry. Prediction markets often resemble sports betting and other forms of wagering, making regulation a key issue for both operators and regulators.

Clear Limits on Certain Contracts

The proposed rule specifically bans contracts connected to terrorist attacks, political assassinations, and acts of war.

Regulators have long worried that these types of contracts could create harmful incentives by allowing people to profit from tragic events. By formally banning them, the CFTC is setting clear limits on what prediction markets can offer.

Many people may see these restrictions as common sense. However, because prediction markets can cover a wide range of events, federal guidance provides significant clarity for platforms and users alike.

The Ongoing Debate Over “Gaming”

While the bans on terrorism and war-related contracts have received the most attention, industry experts are also focused on another part of the proposal: how the CFTC defines “gaming.”

The proposal leaves some uncertainty about how much authority the agency will have over contracts that could be considered gambling. This issue could become especially critical for products that closely resemble sports betting.

The final definition could have a major impact on prediction market companies. Depending on how the rule is written, some operators could face additional restrictions, while others may gain a clearer path for future growth.

Why It Matters, and What Happens Next?

Prediction markets have expanded quickly, attracting both everyday users and larger investors. Their growth has also created tension with gambling operators and state regulators.

Unlike regulated sportsbooks, which must obtain licenses in individual states, prediction market platforms generally operate under a federal regulatory framework. This difference has led some industry groups to argue that the rules are not applied equally.

Although the CFTC’s proposal does not settle those disputes, it begins to define the agency’s role in overseeing prediction markets. The final rules could shape how the industry develops in the years ahead.

The proposal is now entering a 45-day public comment period. During that time, prediction market companies, gambling operators, state regulators, advocacy groups, and members of the public can submit feedback.

After reviewing those comments, the CFTC will decide whether to revise the proposal before issuing a final rule.

The outcome could have a lasting effect on prediction markets, including which contracts are allowed and how the industry is regulated in the future.