CFTC submits prediction market rules to White House for review

The Commodity Futures Trading Commission (CFTC) has submitted two regulatory proposals to the White House Office of Management and Budget to clarify federal oversight of prediction markets.

The first proposal seeks to amend the definition of “swaps” under the Commodity Exchange Act to explicitly include event contracts, which are the yes-or-no products used by platforms like Kalshi and Polymarket. By classifying these as swaps, the CFTC aims to solidify its exclusive federal jurisdiction over these markets.

The second measure is an interim final rule designed to exclude “casino-style gambling products” from the definition of swaps. This distinction is intended to separate traditional gambling from regulated event contracts.

The move comes amid intensifying legal battles between federal regulators and various states. Ohio and Tennessee have successfully challenged Kalshi in federal appeals court to enforce state sports gambling laws, while New Jersey has sought Supreme Court review regarding jurisdictional authority. The outcome of these regulatory and legal disputes will determine whether prediction markets are governed by federal commodity laws or state-level gambling regulations.