The Commodity Futures Trading Commission (CFTC) issued two proposals that would define event contracts as swaps under federal law while excluding traditional casino gambling from that definition. Several states, including Ohio and Tennessee, have sued prediction market operators such as Kalshi and Polymarket for illegal gambling, while the CFTC has countered to defend its federal jurisdiction over these contracts. The first proposal clarifies the swap definition to include event contracts tied to sports, politics, cultural events and weather. Both measures, filed on Friday with 30-day comment windows, set the stage for a potential Supreme Court battle over federal versus state jurisdiction.
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