CFTC Pushes Rules to Claim Prediction-Market Authority — SkimNews
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- CFTC submitted two rules to the White House's OIRA on Sept. 28 — a proposed rule (RIN 3038-AF82) including event contracts as 'swaps' and an interim final rule (RIN 3038-AF81) excluding 'casino-style gambling products' from that definition.
- The 'swap' label is the crux of a jurisdictional fight: if event contracts are swaps, they fall under CFTC authority and beyond state gambling regulators, amid conflicting appeals-court rulings now drawing the Supreme Court's attention.
- Multiple states have sued prediction-market operators including Kalshi and Polymarket alleging illegal gambling, and the CFTC has countersued to block that oversight.
- New York sued Polymarket last week seeking to ban it within the state, echoing an earlier action against Kalshi.
- The CFTC is investigating former Rep. Adam Kinzinger over Kalshi bets tied to his own pardon and issued an advisory warning that 'mention market' contracts settling on whether a named person says certain words should be presumed readily susceptible to manipulation.
- The rulemaking extends a post-Clarity Act pattern of the CFTC writing its own rules rather than waiting on Congress, following a separate crypto-markets rulemaking recently sent to the White House; Chairman Michael Selig has argued the agency's authority is exclusive.
Why it matters: By redefining 'swap' to include event contracts, the CFTC is trying to settle in regulation what courts and states have been fighting case by case — preempting state gambling lawsuits against Kalshi and Polymarket without waiting for Congress or the Supreme Court to rule. The interim final rule's 'casino-style gambling products' carve-out is where the real lobbying fight will land, since it lets the agency draw the line between federally regulated contracts and state-prosecutable gambling.
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