The Commodity Futures Trading Commission on Friday issued a pair of measures designed to formally place prediction markets under its authority, proposing to define event contracts as "swaps" under federal law while expressly carving out casino-style gambling from the agency's remit.

The first measure, a proposed rule opened for public comment, would expand the definition of "swap" to expressly include event contracts, including those tied to sports, politics, cultural events and weather. Event contracts are the core product of prediction markets — platforms such as Kalshi and Polymarket, where users take positions on whether real-world outcomes will occur. The CFTC described the contracts as financial instruments "commonly known to the trade as swaps" and said the move resolves any ambiguity about their regulatory status.

"These products are commodity derivatives squarely within the CFTC's regulatory remit under the Commodity Exchange Act and are within the agency's exclusive jurisdiction," Chairman Michael Selig said in a statement.

The second measure, an interim final rule effective immediately upon publication, draws the opposite boundary. It codifies the agency's longstanding view that casino-style gambling products, including sportsbook wagers and casino games, are excluded from the swap definition. "Casino-style gambling products are not derivatives," Selig said, framing the step as clarifying "the limits of its regulatory remit." Both measures carry 30-day comment windows, giving platforms, state regulators and the public a formal channel to respond.

Taken together, the two rules sharpen the distinction at the heart of a fierce jurisdictional fight: if event contracts are swaps, they fall under the CFTC's authority — which Selig has argued is exclusive — placing platforms such as Kalshi and Polymarket beyond the reach of state gambling regulators. Multiple states have sued prediction-market operators alleging illegal gambling, and the CFTC has countersued to defend its turf.

The filings formalize proposals the agency sent to the White House for review late last month, part of a broader push in which the CFTC has moved to assert its authority rather than wait on Congress. The agency has broadly taken a pro-industry approach toward both traditional and cryptocurrency markets; it recently issued no-action relief letting crypto apps offer regulated derivatives and advanced separate crypto-markets rulemakings.

The legal stakes for prediction markets continue to climb. A court split over whether event contracts qualify as federally regulated swaps — a dispute pitting the NFL and others against Kalshi — has drawn the Supreme Court's attention, meaning the question the CFTC is now attempting to settle through regulation may ultimately be decided by the justices.

The two measures were announced via CFTC press releases (9309-26, 9310-26).