The Commodity Futures Trading Commission (CFTC) has introduced two new measures to clarify its regulatory authority over event contracts. The agency proposes defining these contracts, which cover sports, politics, and weather, as swaps under federal law. This classification places them under the exclusive jurisdiction of the CFTC, effectively distancing them from state-level gambling regulations.
Simultaneously, the commission issued an interim final rule that explicitly excludes casino-style gambling products, such as sportsbook wagers, from the definition of swaps. Chairman Michael Selig stated that these products do not qualify as derivatives. Both measures are now subject to a 30-day public comment period following their publication.
These regulatory actions aim to resolve ongoing jurisdictional disputes involving prediction-market platforms like Kalshi and Polymarket. While the CFTC seeks to assert its authority, the broader legal status of event contracts remains contested. The debate has reached the Supreme Court, which is currently reviewing cases involving the classification of these financial instruments.
