CFTC Proposes New Definition for Swaps Amid Regulatory Dispute
- The CFTC is proposing to expand the definition of “swap” to include event contracts.
- An interim final rule aims to exclude casino-style gambling products from this definition.
- This move comes amid a jurisdictional dispute with state gambling regulators over prediction markets.
- The CFTC claims federal law grants it exclusive authority over swaps on regulated exchanges like Polymarket and Kalshi.
- State regulators argue that sports event contracts fall under state gambling laws, challenging the CFTC’s position.
The proposed changes by the CFTC are currently under review and could significantly impact how prediction markets operate in the U.S., particularly regarding compliance with federal versus state regulations.
As the CFTC seeks to clarify these definitions, the outcome may affect platforms like Polymarket and Kalshi that facilitate event contracts.(Source)
