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The U.S. Commodity Futures Trading Commission has taken a new step in the prediction market debate, announcing two measures that draw a sharper line between federally regulated event contracts and state-licensed gambling products.
One proposal would define event contracts tied to areas such as sports, politics, culture, and weather as swaps under the Commodity Exchange Act. At the same time, the agency issued an interim final rule saying casino-style gambling products — including wagers made through state- or tribal-licensed sportsbooks and casinos — are not swaps.
CFTC draws a line between event contracts and gambling products
CFTC Chairman Michael S. Selig said event contracts fall within the agency’s authority because they are commodity derivatives. In a statement, he said, “Americans use event contracts to hedge risks, speculate, and provide the public with information about the outcome of future events.”
He also said, “Casino-style gambling products are not derivatives.”
According to the CFTC, the interim final rule is meant to reduce interpretive uncertainty and does not change existing legal rights. The rule takes effect upon publication in the Federal Register, while both measures will be open for 30 days of public comment after publication.
Why the move matters now
The announcement arrives as federal courts have issued conflicting rulings on sports-related event contracts, including disputes involving Kalshi. The fact pack notes that the Third, Sixth, and Ninth Circuits have all issued decisions that do not fully align.
New Jersey has already asked the U.S. Supreme Court to review the Third Circuit’s April 6 decision in _Flaherty v. KalshiEX_. Attorneys general from 39 states and the District of Columbia have backed Supreme Court review, and the NFL has also filed a separate brief supporting New Jersey’s position.
The White House Office of Information and Regulatory Affairs logged both CFTC measures for review on September 28.
What players and industry watchers should watch
For people following prediction markets and sportsbook-adjacent products, the key issue is whether certain contracts will be treated as federally regulated derivatives rather than gambling products overseen by states. The CFTC also acknowledged that “a person can achieve similar economic exposure” through event contracts and sportsbook bets, even as it drew a legal distinction between the two.
The next dates to watch are the 30-day public comment windows and the Supreme Court timeline in the Kalshi-related case. Kalshi’s response to New Jersey’s petition is due by November 9 after receiving an extension.
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Source: As reported by news.worldcasinodirectory.com.
