A US soldier was arrested for betting with classified intel — now regulators want to crack down on prediction markets

As concerns grow surrounding the prediction market industry , the Commodity Futures Trading Commission (CFTC) has proposed new limits on what topics can and can’t be subject to wagers. And while sports bettors might shrug, people who enjoy exploring the fringes of prediction markets are likely to grumble.

The proposal, which was first reported by The Wall Street Journal, would give the CFTC the ability to block wagers it feels are not in the public interest or could be susceptible to manipulation (1). That would likely do away with bets on things like war, or player injuries in sports, though wagering on the outcome of the game would still be permitted.

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This proposal follows existing guidance the CFTC has already given prediction markets on where bets should be avoided. Most platforms have moved to remove these sorts of wagers in advance of a formal decree by the regulatory agency.

While the proposal does outline the factors regulators will use when determining if a bet is appropriate, it does not specifically list any type of banned topics.

The objective, say officials, is not to hinder growth, but rather to regulate the markets and cut down on fraud and bets on geopolitical events, which could lure people with knowledge of secret information to make a bet, potentially alerting an enemy to a military attack or endangering lives.