A top financial regulator took a major step toward directly banning derivatives from being used to bet on political contests and sports games — throwing up another hurdle for those hoping to wager on November’s US election.

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The proposal Friday by the Commodity Futures Trading Commission would crack down on so-called event contracts. Those binary options have been used to bet legally on real-world outcomes such as monetary policy, lunar landings and music awards and are of increasing interest to Wall Street.

Although the asset class has grown in popularity and some exchanges offering trading are overseen by the CFTC, betting on events remains controversial.