Overview
- The CFTC issued two coordinated measures that would expressly classify event contracts tied to sports, politics, culture and weather as swaps while adopting an interim final rule that excludes casino-style wagers.
- The interim exclusion uses a Provider Test and a Product Test to identify house-style gambling products: providers must be state- or tribal-authorized gambling operators and the transactions must not trade on multilateral exchanges or designated contract markets.
- Both measures opened 30-day public comment periods and the interim exclusion is effective upon publication in the Federal Register pending those comments and any agency revisions.
- The rulemaking runs alongside active litigation and a federal appeals circuit split over whether sports-related event contracts are swaps, and New Jersey has asked the U.S. Supreme Court to review a Kalshi-related case.
- If finalized and upheld, the rules could steer most exchange-traded prediction markets under federal oversight, reduce the risk of 50 different state regimes for those products, and still leave traditional sportsbook-style house bets to state gaming regulators, affecting operators, exchanges, and sports leagues.