CFTC Proposes New Rules to Define “Swap” in Prediction Markets
- The Commodity Futures Trading Commission (CFTC) sent two rules to the White House on September 28, aiming to redefine “swap” for event contracts.
- A proposed rule, RIN 3038-AF82, would include event contracts as swaps, while an interim final rule, RIN 3038-AF81, would exclude “casino-style gambling products.”
- These rules are central to a jurisdictional dispute over whether prediction markets fall under CFTC authority or state gambling regulators.
- Conflicting court rulings on the matter are currently before the Supreme Court.
- The CFTC’s actions follow a pattern of creating its own rules post-Clarity Act without waiting for Congress.
The CFTC is attempting to establish regulatory clarity over prediction markets by redefining what constitutes a “swap.” This move could place platforms like Kalshi and Polymarket under federal oversight rather than state gambling laws. The proposed changes reflect ongoing legal battles and aim to resolve jurisdictional ambiguities currently being contested in courts.
By submitting these proposals, the CFTC seeks to assert its authority over prediction markets and clarify regulatory boundaries amidst conflicting legal interpretations. Source
