CFTC Proposes Defining Event Contracts as Swaps, Excluding Casino Bets
United States.- 13 October 2026 | www.zonadeazar.com The Commodity Futures Trading Commission, CFTC, has taken another step towards defining the regulatory boundary between prediction markets and traditional gambling in the United States.
The agency has proposed expressly classifying certain event contracts as swaps, while separately issuing an interim rule excluding sportsbook wagers and casino games from that definition.
Event Contracts Under Swap Definition
The CFTC proposal seeks to clarify that contracts tied to future outcomes may fall within the federal definition of a swap.
Covered categories include:
- Sports.
- Politics.
- Cultural events.
- Weather.
The Commission argues that these products operate as derivatives and fall within its regulatory remit.
Federal Jurisdiction for Prediction Markets
CFTC Chairman Michael S. Selig said event contracts are commodity derivatives governed by the Commodity Exchange Act.
The position reinforces the argument used by platforms such as Kalshi that contracts traded on federally registered markets fall under federal jurisdiction.
Sportsbooks and Casinos Excluded
At the same time, the CFTC issued an Interim Final Rule excluding traditional gambling products from the swap definition.
This includes:
- Sportsbook wagers.
- Casino games.
The Commission is seeking to make clear that these products are not financial derivatives.
State Regulation Preserved
The exclusion preserves the traditional role of states in regulating casinos and conventional sports betting.
The CFTC is therefore drawing a regulatory line between federally registered prediction markets and state-regulated gambling products.
Sports Contracts Remain the Key Dispute
The most significant conflict arises when an event contract is tied to the outcome of a sporting event.
States argue these products function materially as sports betting and should be subject to the same licensing, taxation and consumer-protection requirements as sportsbooks.
Prediction market operators argue that they remain derivatives traded on federally regulated exchanges.
Kalshi at the Centre
Kalshi remains involved in multiple legal disputes with state regulators.
The core issue is whether states may apply their gambling laws to sports contracts offered by markets registered with the CFTC.
Conflicting Federal Court Decisions
Federal courts have not reached a uniform position.
Some rulings have favoured federal pre-emption, while others have given states greater room to enforce their own betting laws.
The split has increased the possibility of Supreme Court intervention.
New Jersey Case
The US Supreme Court is currently considering whether to hear New Jersey’s petition in its dispute with Kalshi.
The state is seeking to overturn a decision favouring the platform and obtain nationwide clarity over state authority concerning sports event contracts.
NFL Backs New Jersey
The NFL has also filed arguments supporting New Jersey’s petition.
The league argues that sports event contracts should not be treated as federal swaps and says state gambling regimes provide integrity and consumer-protection safeguards not replicated by financial regulation.
Public Comment Period
The event-contract proposal will remain open for public comment.
Stakeholders will have 30 days from publication in the Federal Register to submit responses.
The interim rule excluding casino and sportsbook gambling will also accept comments during the same period.
Market Continues to Expand
The regulatory debate is taking place as more companies seek to enter the event-contract market.
During 2026, several businesses have applied for Designated Contract Market status with the CFTC, while traditional gaming operators have also begun exploring prediction-market products.
Next Steps or Impact
The CFTC’s new measures are intended to establish a clearer legal boundary between prediction markets and conventional gambling.
If the proposal is finalised, the Commission would formally strengthen its position that event contracts are swaps subject to federal oversight.
However, the conflict with states would not necessarily disappear, particularly around sports contracts, where courts remain divided and the Supreme Court may ultimately be asked to define the limits of federal and state authority.
Editó: @fonta
