The U.S. derivatives and prediction market watchdog has forwarded a pair of new rules to the White House Office of Management and Budget for evaluation. One regulation classifies event contracts directly within the legal framework of swaps, while the other establishes that they are completely separate from gambling—strategic positions as the commission clashes with individual states regarding the classification of these instruments.
The Commodity Futures Trading Commission has fully embraced its responsibility as the federal oversight body for prediction markets and the event contracts they handle, which generally function as binary yes-or-no propositions tied to quantifiable outcomes like elections and athletic competitions. Consequently, the CFTC has initiated efforts to oversee trading platforms like Kalshi while pushing back against legal challenges from state authorities claiming authority to govern certain contracts under state betting laws.
The most recent federal judicial ruling explicitly determined that Kalshi’s sports-related contracts do not qualify as swaps and remain subject to local gambling statutes, despite an earlier federal decision reaching the opposite conclusion.
These upcoming regulatory actions from the CFTC would counter that perspective by providing a more expansive explanation of swaps, which are financial contracts overseen by the agency where two entities agree to a transaction. The commission aims to introduce a regulation broadening the statutory scope of swaps so it encompasses event contracts exchanged on prominent networks such as Kalshi, Polymarket, Crypto.com, and Robinhood. Furthermore, the agency is pursuing an interim final rule designed to exclude casino-grade betting activities from qualifying as swaps.
Both documents reached the OMB this week, marking what is typically the final step before regulations are published for public review and commentary. In the situation of an interim final regulation, the policy would take effect immediately while still welcoming feedback and prospective modifications.
Should event contracts be categorized as swaps, and those specific swaps excluded from the category of gambling offerings, the maneuver could undermine the legal foundation of various state-level lawsuits targeting prediction market operators—most notably Kalshi—for supposedly running unlawful betting exchanges within their borders.
The CFTC has actively participated in these court battles, frequently initiating legal action against states to defend what Chairman Mike Selig maintains is the agency’s exclusive authority over prediction markets. This disagreement has sparked contradictory decisions among federal appellate courts, raising the probability that the U.S. Supreme Court may ultimately be called upon to settle the controversy.
Previously, the U.S. Sixth Circuit Court of Appeals ruled that sports wagers on Kalshi fail to qualify as swaps, a stance echoed by the Eighth Circuit Court of Appeals in a comparable judgment. Conversely, the Third Circuit previously concluded that the commission held proper authority over prediction markets, generating a clear division in federal jurisprudence.
Although the regulatory filings submitted to the White House on September 28 omit deeper specifics or the precise wording of the proposals, the agency classified both directives as non-economically significant.
Though structured by law as a five-seat panel, President Donald Trump has abstained from appointing additional commissioners, leaving Selig as the sole active member. Because of this vacancy, he has continued to execute regulatory and policy determinations independently.
The OMB disclosures also highlight a previously submitted preliminary rule directed at cryptocurrency oversight transmitted to the White House, although the commission did not elaborate on the specific details of that initiative.
Originally published at https://www.coindesk.com/policy/2026/09/30/u-s-cftc-seeks-event-contract-definitions-that-may-defy-states-gambling-claims.
