The Commodity Futures Trading Commission (CFTC) is taking steps to clarify which event contracts are considered swaps, as the prediction market industry continues to grow in both reach and offerings. This move comes as the CFTC has submitted two important rule proposals to the White House for evaluation, amid ongoing jurisdictional disputes with state regulators.
One of the notable developments is CBS News integrating Kalshi's prediction market data into its coverage of the upcoming midterm elections. This partnership aims to enhance the network's political analysis without replacing its independent polling efforts.
In addition, Polymarket has rolled out new responsible trading tools to better protect users as scrutiny over consumer safeguards in prediction markets intensifies. These tools allow users to voluntarily self-exclude from the platform for varying periods.
Meanwhile, the CFTC's proposed rules include one that aims to exclude casino-style gambling products from being classified as swaps. Both proposals were submitted to the Office of Information and Regulatory Affairs on September 28 and are currently under review.
As the prediction market sector expands, concerns about its overlap with traditional gambling have arisen. The CFTC's new filing appears to address these issues, although the precise boundaries of regulation remain uncertain.
In the context of ongoing legal disputes, federal appeals courts are divided on whether sports contracts fall under the CFTC's jurisdiction. The Third Circuit has sided with Kalshi in New Jersey, while other circuits have rejected similar claims in states like Nevada and Ohio. This legal contention may escalate to the U.S. Supreme Court, with several parties seeking a review of the relevant rulings.