The CFTC submitted two proposed rules to the White House Office of Information and Regulatory Affairs for review. One would exclude casino-style products from the definition of swaps, while the other would include event contracts; both remain under review.
The proposals could shape whether CFTC-regulated prediction markets offer casino-style products or sports-related event contracts.
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The CFTC issued two proposals concerning federal oversight of event contracts. The proposals would classify event contracts as swaps while prohibiting traditional gambling, with the expanded definition covering contracts linked to culture, weather, politics and sport.
The CFTC has sent two proposed rules to the White House Office of Management and Budget for review, reportedly earlier this week. One would exclude casino-style gambling from the definition of a swap; the other would classify event contracts as swaps and follow the standard public-comment process.
The US Court of Appeals for the Sixth Circuit ruled that Ohio and Tennessee can apply state gambling laws to event contracts in a case involving Kalshi. Judge Julia Smith Gibbons said Kalshi had not shown that its sports products qualified as swaps under federal law. Kalshi said it expects further legal review to overturn the ruling.
Reportedly, Two federal appeals courts disagree on whether sports event contracts constitute bets. Three petitions are before the Supreme Court as Kalshi continues to record trading highs.
The US Court of Appeals for the Ninth Circuit ruled 3-0 for the Blue Lake Rancheria and Chicken Ranch Rancheria of the Me-Wuk Indians in part of their case against Kalshi and Robinhood. The panel found the tribes likely to succeed in arguing that Kalshi’s sports-event contracts on tribal lands violated the Indian Gaming Regulatory Act and tribal gaming ordinances, and sent the case back to the lower court to review remaining claims. The ruling did not order Kalshi to stop offering contracts in California.