CFTC aims to differentiate swaps from gambling
The CFTC proposed two rules to define event contracts as swaps while excluding casino gambling, setting up a potential Supreme Court battle.Summary
The Commodity Futures Trading Commission (CFTC) has issued two proposals: one defining event contracts as "swaps" under federal law, and another explicitly excluding traditional casino gambling from that definition. This comes amid lawsuits by several states against prediction-market operators like Kalshi and Polymarket, alleging illegal gambling, with the CFTC countersuing to defend its federal jurisdiction. CFTC Chairman Michael Selig stated that event contracts are commodity derivatives within the agency's exclusive remit under the Commodity Exchange Act, and that casino-style gambling products are not derivatives. Recent court rulings have been mixed: Kalshi lost on appeal in a case allowing Ohio and Tennessee to regulate sports-event contracts under state gambling laws, but an April decision by the 3rd Circuit Court of Appeals allowed Kalshi to operate in New Jersey pending appeal. State lawmakers have filed an amicus brief urging the Supreme Court to resolve the jurisdiction question.
(Source：Headtopics)