The Commodity Futures Trading Commission submitted two rulemakings to the White House Office of Information and Regulatory Affairs on September 28, 2026, aiming to reshape the definition of a swap as it applies to event contracts and casino-style gambling. One proposal would fold event contracts into the swap category; a separate interim final rule would exclude casino-style gambling products. The moves come amid a widening legal battle over whether platforms like Kalshi and Polymarket answer to federal commodities regulators or state gambling authorities.
Two rulemakings, two procedural paths
The proposed rule appears on the OIRA website as RIN 3038-AF82, titled 'Further Definition of Swap to Include Event Contracts.' The other filing, RIN 3038-AF81, is called 'Further Definition of Swap to Exclude Casino-Style Gambling Products' and has been tagged as an interim final rule, meaning it could be finalized without a standard public comment period. According to FinanceFeeds, neither filing has been classified as economically significant or assigned a legal deadline, and the full text of both measures had not been made public as of early October.
Proposed rule adds event contracts to swaps
The proposed rule would explicitly bring event contracts under the statutory definition of a swap. Under the Commodity Exchange Act, products classified as swaps fall within the CFTC’s purview, and the agency’s chairman, Michael Selig, has said that authority is exclusive. The move builds on a June CFTC proposal that outlined how the agency would review event contracts tied to gaming, war, terrorism, assassination, and conduct barred by federal or state law.
Interim rule carves out casino gambling
The interim final rule seeks to remove casino-style gambling products from the swap definition. Because it is an interim final rule, it could take effect when published in the Federal Register, without the usual prior notice-and-comment period, although the agency has not disclosed the rule’s legal basis or when it would become effective. Gaming attorney Daniel Wallach commented on social media that if the interim rule goes beyond excluding casino-style products and provides tacit authorization for sports event contracts, it could trigger immediate litigation under the Administrative Procedure Act, according to Covers.
Conflicting court rulings fuel urgency
Federal appeals courts have split on whether sports event contracts qualify as swaps. The Sixth Circuit ruled against Kalshi in matters involving Ohio and Tennessee, saying the company had failed to show that its sports products hinge on events with a 'financial, economic, or commercial consequence,' a phrase from the Commodity Exchange Act. By contrast, the Third Circuit backed Kalshi in its New Jersey case, finding the exchange was likely to prevail on its view that sports event contracts are swaps and that federal law preempts state enforcement. New Jersey regulators asked the Supreme Court on September 2 to review that decision, and the justices have not said whether they will take the case.
States and platforms prepare for legal challenges
The CFTC has gone to court against Arizona, Connecticut, Illinois, New York, Wisconsin, New Mexico and Kentucky over state efforts to apply gambling laws to federally regulated prediction markets. States respond that contracts tied to game results and player performances behave like sports wagers and therefore belong under state licensing, age, consumer-protection and taxation rules. The conflict has widened: New York recently sued Polymarket’s U.S. operation, alleging illegal gambling, and Polymarket countered with its own federal suit claiming that commodities law preempts state regulation. OIRA review is a checkpoint, not a final approval of the CFTC’s legal position, and the decisive details will emerge only when the rule texts are published, according to Yahoo Finance.
