Regulator Proposes Ban on Betting Derivatives for Political and Sporting Events
With the US presidential elections coming closer, one of the country’s financial regulators has set about banning derivatives for bets on political contests and sports.
Ban on derivative betting on sports and elections proposed by CFTC.
LISTEN TO THIS ARTICLE:While it is not yet known if the ban will be implemented at all, let alone before the election, there is a chance that people in the US may be prevented from betting on the upcoming elections.
The Commodity Futures Trading Commission (CFTC), an independent government agency that is charged with investigating and prosecuting crimes such as commodity fraud, energy manipulation, hedge fund fraud, and foreign currency schemes, confirmed that it has issued a Notice of Proposed Rulemaking.
Related: Political Gambling on US Elections Jeopardizes Democratic Process
Banning Betting on Events Contrary to the Public Interest
According to the notice, the agency is considering specifying event contracts that come under the scope of the Commodity Exchange Act (CEA). Per the existing rules, the CFTC has the ability to ban betting derivatives and event contracts that are linked to war, terrorism or assassination. It may also ban bets on events that are “contrary to the public interest”.
The Commission has recently observed an increase in the number and variety of event contracts listed for trading by CFTC-registered exchanges. In addition, the Commission has recently received applications for exchange registration and expressions of interest regarding registration from entities indicating that they are interested in listing event contracts for trading.
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A Detailed Definition of Gaming
At present, the Commission’s official definition of gaming is very broad. It is planning to rectify this and provide a detailed definition of “gaming”.
In its statement, the CFTC said that its proposal provides a detailed list of what gaming is including, “staking or risking something of value on the outcome of a political contest, an awards contest, or a game in which one or more athletes compete, or an occurrence or non-occurrence in connection with such a contest or game.”
According to the CFTC, contracts such as these are instances of gaming that may not be listed for trading or approved under the current proposal. Public comment on the proposal is now open, and comments can be submitted up to July 9, 2023, inclusive. The agency will then make appropriate changes to the proposal before it is voted on.
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