Commodity Futures Trading Commission proposes crackdown on prediction markets tied to war, terrorism, and assassination

The CFTC's proposed rule changes could reshape prediction markets by targeting contracts linked to violence and geopolitical chaos.

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Add us on Google by Editorial Team Jun. 10, 2026

The US Commodity Futures Trading Commission proposed rule changes on June 10 that would tighten oversight of prediction markets, with contracts tied to war, terrorism, and assassination squarely in the crosshairs.

What the CFTC is actually proposing

The proposed rules don’t amount to a blanket ban on prediction market contracts. Instead, the CFTC is suggesting a structured, case-by-case framework for evaluating event contracts. Each contract would be assessed based on factors like public interest and susceptibility to manipulation. Contracts involving armed conflict, acts of terror, and targeted killings would almost certainly be flagged for prohibition under this framework.

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The CFTC already has tools to act under the existing Commodity Exchange Act, which gives the agency authority to ban contracts deemed harmful to the public interest. But the new proposal would formalize and expand how that authority gets exercised. An Advance Notice of Proposed Rulemaking on this issue was issued from March 12 through March 16, with the public comment period closing on April 30. The formal proposal that dropped on June 10 reflects what the agency heard during that window.

The political pressure behind the proposal

Democratic lawmakers sent letters in April expressing concerns about insider trading risks and national security implications of prediction markets that allow bets on geopolitical violence. The DEATH BETS Act, introduced in March 2026, seeks to explicitly ban contracts linked to death-related events.

The volatile period of US-Iran tensions in early 2026 saw prediction market platforms flooded with bets on military actions in the Middle East. Two platforms in particular have drawn scrutiny: Kalshi, which operates as a CFTC-registered exchange, and Polymarket, which runs offshore and has been involved in controversial betting on geopolitical events.

What this means for investors and the prediction market industry

If the DEATH BETS Act passes alongside the CFTC’s regulatory framework, the combined effect would create a two-layered restriction: agency rules governing what types of contracts are permissible, plus statutory law explicitly banning the most extreme categories.

For CFTC-registered exchanges like Kalshi, compliance would be mandatory. For offshore platforms like Polymarket, US regulatory proposals don’t directly bind their operations, but they can make it harder for those platforms to serve US customers or partner with US financial institutions.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.