CFTC Sends New Prediction Market Rules to White House for Review
The CFTC has submitted two rules to the White House aimed at solidifying federal oversight of prediction markets by classifying event contracts as swaps while excluding casino-style gambling.
The Commodity Futures Trading Commission submitted two rules to the White House Office of Management and Budget on September 30, 2026. The move represents an effort by the agency to establish federal jurisdiction over prediction markets, distinguishing them from state-regulated gambling.
The first measure is a proposed rule that would amend the definition of a swap to explicitly include event contracts. By bringing these yes-or-no products under the Commodity Exchange Act, the agency aims to anchor them within its regulatory framework.
The second measure is an interim final rule that would exclude casino-style gambling products from the swap classification. This tool allows the rule to take effect while still gathering public comments, bypassing the standard notice-and-comment cycle.
These rules arrive amid ongoing legal disputes with several states. Ohio and Tennessee have challenged the agency in court, arguing that sports-linked contracts conflict with state gambling laws. Additionally, the attorney general of New Jersey has requested that the Supreme Court review the question of jurisdiction.
The agency has been active in this space throughout the year. In June, it issued a notice of proposed rulemaking regarding event contracts tied to specific activities. On September 22, 2026, the Division of Market Oversight released an advisory highlighting manipulation risks associated with mention markets, which are contracts that settle based on statements made by specific individuals.
Platforms such as Kalshi and Polymarket currently operate as federally supervised designated contract markets. Other entities, including Crypto.com and Robinhood, also provide similar products for traders.
The proposed carve-out for casino-style products introduces uncertainty regarding the distinction between event contracts and gambling. While the rules aim to clarify the agency's authority, they remain subject to White House review. A potential Supreme Court ruling could ultimately alter the regulatory landscape regardless of the agency's internal rule-making efforts.
