The U.S. Commodity Futures Trading Commission (CFTC) has submitted two new rules for approval to the White House. The proposed regulations indicate that the regulator intends to classify event contracts as swaps, which are derivative financial instruments under its oversight. Meanwhile, casino-format games will be excluded from this classification.
The texts of the rules have not yet been published. Once approved, the rule regarding event contracts will be open for public discussion, while the rule concerning casino-format games could take effect immediately after approval. The CFTC maintains that prediction markets fall solely under federal oversight; however, several states are challenging this in court.
The Third Circuit Court of Appeals sided with the prediction market platform Kalshi in its dispute with New Jersey, while the Sixth and Ninth Circuits issued opposing rulings in cases from Nevada, Ohio, and Tennessee.