The CFTC issued two measures on Friday: a proposed rule that would classify event contracts as swaps, and an interim final rule that excludes casino-style gambling. The agency is asserting authority over prediction markets as states sue operators and the Supreme Court takes interest.
The Commodity Futures Trading Commission is pressing its claim over prediction markets, issuing a pair of measures Friday that would define event contracts as "swaps" under federal law while carving out traditional gambling.
One rule pulls event contracts in
The first measure, a proposed rule open for public comment, would expressly expand the definition of "swap" to cover event contracts, including those tied to sports, politics, cultural events and weather. The CFTC said the contracts are financial instruments that count as swaps and that the move resolves any ambiguity about their status.
Chairman Michael Selig said in a statement that these products are commodity derivatives within the agency's remit under the Commodity Exchange Act and its exclusive jurisdiction.
The other rule pushes gambling out
The second measure, an interim final rule, takes effect immediately upon publication. It codifies the agency's longstanding view that casino-style gambling products, including sportsbook wagers and casino games, fall outside the swap definition. According to Selig: "Casino-style gambling products are not derivatives." Both measures carry 30-day comment windows.
Why the line matters
If event contracts are swaps, they fall under CFTC authority, which Selig has argued is exclusive. That would place platforms like Kalshi and Polymarket beyond the reach of state gambling regulators. Multiple states have sued prediction-market operators alleging illegal gambling, and the CFTC has countersued.
The filings formalize proposals the agency sent to the White House for review late last month. Meanwhile, a court split over whether event contracts qualify as federally regulated swaps, pitting the NFL and others against Kalshi, has drawn the Supreme Court's attention. The question the CFTC is trying to settle by regulation may ultimately be decided by the justices.
Source: Decrypt
Trading involves risk.
Risk Disclaimer
