CFTC classifies prediction contracts as swaps while exempting sportsbook wagers
The Commodity Futures Trading Commission moved Friday (October 9, 2025) to formally classify sports, political, cultural and weather event contracts as swaps, the derivative category it already oversees, while separately codifying that sportsbook and casino wagers sit outside that definition. The twin actions aim to settle a classification fight that has entangled platforms including Kalshi and Polymarket, but a federal appeals ruling from two weeks earlier shows the deeper legal battle over state gambling authority remains unresolved.
- CFTC Chairman Michael S. Selig said these products fall within the agency’s exclusive jurisdiction under the Commodity Exchange Act.
- The agency opened a 30-day comment window on Regulations.gov for the swap-definition proposal, tied to its eventual Federal Register publication date.
- On Sept. 25, the Sixth Circuit ruled Kalshi had not shown its sports contracts meet the statutory swap definition, and that Ohio and Tennessee gambling laws could still apply regardless.
- 30 days comment window attached to both of Friday’s CFTC actions
- Sept. 25 date the Sixth Circuit ruled against Kalshi on state preemption
The Commodity Futures Trading Commission said in a Notice of Proposed Rulemaking published Friday that it intends to expressly define the term “swap” to include event contracts tied to sports, politics, cultural events and weather outcomes. The agency published a companion interim final rule the same day stating that casino-style wagers, including sportsbook bets, fall outside that same definition and remain exempt from its oversight. Event contracts work like yes-or-no bets with a fixed payout, usually $1, settled against a future outcome.
Selig Calls Event Contracts Commodity Derivatives Under CFTC’s Exclusive Reach
Selig framed the proposal as a clarification rather than a policy shift, arguing the products already function as derivatives regardless of the sports, political or weather labels attached to them.
“Americans
Get this in your inboxThe Crypto Coin Show newsletter covers the policy and market moves institutional crypto investors are pricing in.