CFTC Proposes New Rules for Event Contracts, Challenging State Gambling Claims
- The CFTC aims to redefine swaps to include event contracts traded on platforms like Kalshi and Crypto.com.
- An interim final rule is being pursued to exclude “casino-style gambling products” from the swap definition.
- Both proposals were submitted to the OMB for review, a key step before public comment.
- If accepted, this could weaken states’ lawsuits against prediction market companies like Kalshi.
- CFTC Chairman Mike Selig argues for the agency’s exclusive jurisdiction over prediction markets amidst conflicting federal court rulings.
The proposed changes by the CFTC could significantly impact the legal landscape for event contracts and prediction markets, potentially undermining state-level claims of illegal gambling. This move comes as part of ongoing litigation where the CFTC defends its jurisdiction against state lawsuits.
If event contracts are classified as swaps, it may lead to a shift in how these instruments are regulated, affecting platforms like Kalshi and Crypto.com significantly. (Source)
