CFTC proposes new swap definition to regulate prediction markets

The Commodity Futures Trading Commission wants to settle one of the messiest turf wars in American finance. Its tool is a definition. The agency has proposed folding event contracts tied to sports, politics, culture and weather into its legal definition of swaps. That would place prediction markets more firmly under federal oversight, at a moment when several states argue those markets are gambling in a nicer suit. Two rules, one dividing line The CFTC moved on two fronts at once. On October 9, 2026, it issued an Interim Final Rule alongside a Notice of Proposed Rulemaking. The interim rule handles the exclusion side of the ledger. It states that casino-style gambling products, including sports wagers and casino games, do not count as swaps under the Commodity Exchange Act. The proposed rule handles inclusion. It would bring event contracts based on sports, politics and weather inside the swap definition. The proposal has a specific target. It focuses on event contracts traded on CFTC-registered designated contract markets, known as DCMs. DCMs are federally registered exchanges, the regulated venues where futures and similar products change hands. Putting the line there means the p...