CFTC proposes treating event contracts as swaps while excluding casino gambling

The Commodity Futures Trading Commission proposed Friday to expressly include certain event contracts in the definition of a swap. It separately issued an interim final rule excluding casino style gambling products from that definition. The proposed rule covers contracts based on sports, politics, cultural events and weather. The agency said these financial instruments are commonly known in the trade as swaps and that the proposal would resolve ambiguity over their classification. CFTC Chairman Michael S. Selig said Americans use event contracts to hedge risks, speculate and obtain information about future outcomes. He described the products as commodity derivatives within the agency’s exclusive jurisdiction under the Commodity Exchange Act. The proposal could strengthen the position of Kalshi and Polymarket US, which have defended federal oversight of their event contracts against challenges from state gambling regulators. Explicitly classifying those contracts as swaps would reinforce the CFTC’s jurisdiction argument, although the proposal remains subject to public comment and would not automatically resolve ongoing court disputes. The event contract measure is a notice of propos...