CFTC seeks to define event contracts as swaps amid prediction market fight
Summary
The US Commodity Futures Trading Commission is trying to clarify what counts as a “swap” as it fights state gambling regulators over prediction markets. A regulatory docket shows the CFTC has submitted two rules for review: a proposed rule that would expand the swap definition to include event contracts, and an interim final rule that would exclude casino-style gambling products. The issue is important because the CFTC says federal law gives it exclusive authority over swaps traded on regulated exchanges, including products from Polymarket and Kalshi. State regulators disagree, especially on sports-related event contracts, and argue those products fall under state gambling laws.
