CFTC Moves to Define Event Contracts as Swaps in Prediction Market Jurisdiction Fight

The US Commodity Futures Trading Commission is seeking to clarify what counts as a “swap” as it battles state gambling regulators over prediction markets. A federal regulatory docket shows the agency has sent two items for review: a proposed rule that would widen the swap definition to cover event contracts, and an interim final rule that would exclude casino-style gambling products.

Why the Swap Classification Matters

The agency has argued that federal law gives it sole authority over swaps traded on its regulated exchanges, including those run by Polymarket and Kalshi. Calling event contracts swaps would strengthen that claim.

State officials dispute that position, especially for sports event contracts. They say those contracts fall under state gambling laws, not federal oversight.