The US Commodity Futures Trading Commission (CFTC) published two rules on the 9th concerning event contracts in prediction markets. One is an interim final rule excluding casino-style gambling products from the definition of a swap, and the other is a proposed rule that explicitly defines event contracts based on occurrences such as sports, politics, culture, and weather as swaps. CFTC Chairman Michael Selig explained that the aim is to clarify the scope of regulatory authority by stating that casino-style gambling products are not derivatives, and said that event contracts fall under the CFTC's exclusive jurisdiction under the Commodity Exchange Act. The interim final rule takes effect immediately upon publication in the Federal Register, with comments collected after the fact within 30 days of publication. The proposed rule also accepts written comments within 30 days of Federal Register publication. Behind this is a jurisdictional dispute between several states, which deem sports-related event contracts in prediction markets to be illegal sports betting, and the CFTC, which holds that such contracts are swaps and cannot be cracked down on by states. According to a CNBC report on the 8th, the National Football League (NFL) filed an amicus brief with the Supreme Court in a lawsuit involving the state of New Jersey and the prediction market Kalshi, arguing that sports-related contracts are essentially gambling and that regulation should be left to the states.
NFL filed an amicus brief arguing sports-related event contracts are gambling and should be regulated by states, not the CFTC.
