CFTC Draft Rules Target Separation of Prediction Markets From Gambling
The CFTC proposed rules to classify event contracts as swaps while excluding casino-style gambling from that definition.Summary
The U.S. Commodity Futures Trading Commission (CFTC) has proposed two rules to clarify the regulation of prediction markets and event contracts. One proposal would define event contracts—covering sports, politics, cultural events, and weather—as "swaps" under the Commodity Exchange Act, bringing them within the CFTC's exclusive jurisdiction. The second proposal would exclude casino-style gambling products, such as sportsbook wagers and casino games, from the "swap" definition. CFTC Chairman Michael Selig said these products are commodity derivatives squarely within the agency's remit, while casino-style gambling is not. The proposals, filed Friday with a 30-day public comment period, come amid legal battles between the CFTC and states like Ohio, Tennessee, and New Jersey over whether prediction-market operators such as Kalshi and Polymarket fall under federal derivatives law or state gambling laws. Courts have issued mixed rulings, and the issue may ultimately reach the Supreme Court. The CFTC's rulemaking could influence how courts interpret the jurisdictional boundary between federal and state oversight of prediction markets.
(Source：Crypto Breaking News)