The Commodity Futures Trading Commission (CFTC) has issued two proposals, one that would define event contracts as “swaps” under federal law and another that excludes traditional casino gambling from that definition.
Several states have sued prediction-market operators, including Kalshi and Polymarket, alleging illegal gambling, and the CFTC has countersued to defend its federal jurisdiction over event contracts, which it claims are beyond the purview of state regulators.
The first proposal clarifies the definition of “swap” to include event contracts, including those tied to sports, politics, cultural events and weather.
It notes these contracts are financial instruments that are commonly known to the trade as swaps and proposes to resolve any ambiguity regarding them.
“These products are commodity derivatives squarely within the CFTC’s regulatory remit under the Commodity Exchange Act and are within the agency’s…
