From Gaming to Governance: An Early Primer on Rules and Risks for Prediction Platforms | HUB

Unlike conventional sportsbooks, regulated platforms function underneath Commodity Exchange Act and US Commodity Futures Trade Commission (CFTC) guidelines for by-product merchandise, interesting to institutional gamers and retail merchants alike. Despite the federal framework for binary choices, even federally regulated platforms face authorized challenges on the US state degree. Sports-based contracts listed on registered platforms have triggered cease-and-desist letters and injunctions in Nevada and New Jersey, amongst different US states, as these states contest whether or not occasion contracts are monetary swaps or playing topic to state regulation and licensing necessities. The litigation danger concerned with working and buying and selling on these platforms is one amongst different varieties of rising regulatory issues, together with insider buying and selling, conflicts of curiosity—and inner market making desks—cross-market manipulation danger, and the CFTC’s self-certification course of. While there are indications that Congress may take motion associated to insider buying and selling and market manipulation, the CFTC’s give attention to prediction markets will come into focus within the coming years underneath the brand new Chairman’s regime. 

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