CFTC seeks to define event contracts as swaps in market dispute

The US Commodity Futures Trading Commission is working on a proposal to classify event contracts as swaps, a move that could affect how prediction markets are regulated in the United States. According to a regulatory docket, the agency has submitted a rule that would expand the definition of a swap to include event contracts. It has also proposed an interim rule to exclude casinostyle gambling products, and both measures are now under review. The issue is important because the CFTC says federal law gives it exclusive authority over swaps traded on regulated exchanges such as those used by Polymarket and Kalshi. State regulators have challenged that view, especially for sportsrelated contracts, arguing that they fall under state gambling laws.