CFTC considers outright ban on derivative bets on US elections, Bloomberg News reports

Kalshi sued the CFTC in November, saying the regulator overstepped its bounds when it rejected its proposal to use derivatives contracts to bet on whether a particular party will control the U.S. House of Representatives and the Senate in a given term.

The U.S. Commodity Futures Trading Commission is weighing an outright ban on using derivatives to bet on U.S. elections, Bloomberg News reported on Wednesday, citing people familiar with the matter. The CFTC's draft proposal would increase oversight of the contracts used by people to wager on real-world outcomes such as monetary policy, lunar landings and music awards, the report said.

The regulator may also prohibit some contracts on sports and calamities such as global health crises, the report added. The CFTC did not immediately respond to a Reuters request for comment.

The regulator has previously cracked down on derivatives bets linked to congressional control by banning predictions marketplace Kalshi from listing and clearing its cash-settled political event contracts in September last year, concerned that they would involve unlawful gaming and other activities not in the public's interest. Kalshi sued the CFTC in November, saying the regulator overstepped its bounds when it rejected its proposal to use derivatives contracts to bet on whether a particular party will control the U.S. House of Representatives and the Senate in a given term.

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