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CFTC Proposes Rules to Ban Extreme-Event Bets and Limit Manipulative Sports Markets

The move gives the CFTC broad authority to curb contracts tied to war, assassination and other high-risk events.

Advertising outside Madison Square Garden in New York on June 10, 2026, promoting Polymarket’s prediction betting service for NBA Finals wagers. Source: REUTERS/Richard B. Levine.
In this photo illustration, An app for Kalshi, an online prediction market site, is shown on February 25, 2026 in Chicago, Illinois. (Photo Illustration by Scott Olson/Getty Images)
CHICAGO, ILLINOIS - FEBRUARY 25: In this photo illustration, An app for Kalshi, an online prediction market site, is shown on February 25, 2026 in Chicago, Illinois. Online prediction market platforms allow people to place bets on wide-ranging subjects such as sports, finance, politics and currents events. (Photo Illustration by Scott Olson/Getty Images)
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Overview

  • The Commodity Futures Trading Commission released a 267-page Notice of Proposed Rulemaking on Wednesday that would bar wagers on war, assassination and terrorism and would target micro sports markets judged highly susceptible to manipulation.
  • Kalshi responded immediately by rolling out market-integrity tools that include risk scoring for contracts, whistleblower reporting features and a requirement that traders in higher-risk markets disclose their employers before trading.
  • A bipartisan group of 16 Senate Democrats led by Amy Klobuchar urged the CFTC to tighten oversight and require clearer protections after a string of insider-trading incidents raised concerns about retail trader safety and market integrity.
  • The proposal starts a 45-day public comment period but does not address enforcement against offshore platforms such as Polymarket’s international exchange, leaving legal questions and state-federal fights over jurisdiction unresolved.
  • Industry groups and sports leagues warn the rules are too permissive for sports betting while critics say the measures could shift disputes into court and shape whether states keep tax revenue and consumer safeguards for gambling-like products.