Matt Levine’s Money Stuff: War Markets Have Some Bugs

Death predictions

The US Commodity Futures Trading Commission, which regulates prediction markets, has a rule, Rule 40.11, that prohibits those markets from listing any contract “that involves, relates to, or references terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law.” I don’t know how seriously the CFTC or the prediction markets take that rule. Certainly until about a year ago, everyone understood that rule to prohibit prediction markets from offering sports betting (“gaming”); now the prediction markets are mostly venues for sports betting, and the CFTC has explicitly endorsed this. So I am ...