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The Commodity Futures Trading Commission has taken two related steps to draw a clearer line between prediction-market contracts and traditional gambling. On Oct. 9, the agency proposed treating sports and other event contracts as swaps, while also issuing an interim final rule to formally exclude sportsbook and casino wagers from the swap definition.
That distinction matters because the two actions point in opposite regulatory directions: event contracts could fall under the CFTC’s exclusive authority under the Commodity Exchange Act, while standard sportsbook and casino bets would remain outside that framework.
CFTC proposal would pull event contracts into swap definition
According to the agency’s announcement, the proposal would expressly include sports, political, cultural, and weather event contracts in the definition of a swap. CFTC Chairman Michael S. Selig said those event contracts fall within the agency’s exclusive jurisdiction under the Commodity Exchange Act.
The proposal is not final. It will be open for public comment for 30 days after publication in the Federal Register. The source does not specify when that publication will occur, so the comment deadline is not yet clear.
Sportsbook and casino wagers would stay outside the framework
At the same time, the CFTC announced an interim final rule codifying that sportsbook and casino wagers are excluded from the swap definition. Unlike the event-contract proposal, that exclusion takes effect immediately upon publication in the Federal Register, though it also carries a 30-day comment window.
The source does not identify the Federal Register publication date for that rule either.
Why the split matters
The announcement arrives shortly after a Sept. 25 ruling from the Sixth Circuit involving Kalshi’s sports-event contracts. The court held that Kalshi had not shown those contracts met the statutory definition of a swap. It also said that, even if they were swaps, the Commodity Exchange Act did not expressly or impliedly preempt the gambling laws of Ohio or Tennessee.
That leaves several open questions for operators, regulators, and consumers. The CFTC has signaled that it wants a sharper distinction between federally regulated event contracts and conventional gambling products, but the event-contract portion is still only a proposal. Better Markets criticized the distinction, arguing that sports event contracts effectively enable sports betting and should remain subject to state gambling laws.
For readers in New York, the immediate takeaway is that this is a federal regulatory development to watch rather than a change in state betting rules. The next key milestone is Federal Register publication, which will start the clock on the relevant comment periods.
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Source: As reported by cryptoslate.com.
