CFTC Proposes to Include Prediction Market Event Contracts in "Swaps" Definition to Draw a Clear Line From Gambling

TechFlow reports that on September 30, according to CoinDesk, the U.S. Commodity Futures Trading Commission (CFTC) has submitted two proposed rules to the White House Office of Management and Budget (OMB): first, to formally include event contracts traded on platforms such as Kalshi, Polymarket, Crypto.com, and Robinhood within the regulatory definition of "swaps"; and second, to explicitly exclude casino-style gambling products from the scope of swaps. This move aims to respond to recent rulings by multiple federal courts—both the Sixth Circuit Court of Appeals and the Eighth Circuit Court of Appeals ruled that Kalshi's sports-related contracts do not constitute swaps and should be subject to state gambling regulations, while the Third Circuit Court of Appeals affirmed the CFTC's jurisdiction over prediction markets. The circuit courts' rulings are in conflict, and the matter may ultimately need to be decided by the U.S. Supreme Court. Currently, the CFTC has only one commissioner, Chairman Mike Selig, and all related decisions are made by him alone.