The U.S. Commodity Futures Trading Commission (CFTC) has sent two new rules to the White House for review, both of which deal with how the agency defines the event contracts used on prediction market platforms. One rule would formally classify these event contracts as “swaps,” a category of financial products that falls under CFTC authority. A second would remove “casino-style gambling products” from that same swap definition. Taken together, the two measures are designed to separate prediction markets from state gambling law entirely. Because that definition decides which regulator’s rules apply, it sits at the center of the ongoing dispute over these platforms.

The submissions were flagged in a CoinDesk report published the same week. The development was also noted on X, where the analysis account Coin Bureau wrote:

It's OVER. The SEC and CFTC are done waiting for the CLARITY Act. Regulators have now made at least 9 moves to build crypto rules without Congress. 1. SEC Crypto Task Force – define what is and is not a security 2. Project Crypto – modernize SEC rules for onchain markets 3.… pic.twitter.com/wviv65MA7p

— Coin Bureau (@coinbureau) September 30, 2026

The CFTC wants to officially classify event contracts as swaps. Swaps are financial products regulated by the CFTC in which two parties agree to an exchange based on an outcome. The companion rule would exclude “casino-style gambling products” from that same definition, drawing a clear regulatory line between prediction markets and gambling. For the industry, that line determines whether platforms answer to a single federal regulator or to state gambling authorities across the country.

Why the CFTC Is Pushing the Rules

Event contracts are simple yes-or-no bets on measurable outcomes. People use them to wager on events such as election results or sports outcomes. Platforms including Kalshi, Polymarket, Crypto.com, and Robinhood offer these contracts to users, and the CFTC has positioned itself as the main federal regulator over these platforms and the products they offer.

States have pushed back against that positioning. Many argue that sports-related event contracts should fall under state gambling laws rather than federal oversight. This disagreement has led to lawsuits across multiple states, and Kalshi, in particular, has been accused in several states of running an illegal gambling operation.

Court Rulings Have Been Mixed

Federal courts have not agreed on how to classify these contracts. Last week, the Sixth Circuit Court of Appeals ruled that Kalshi’s sports contracts are not swaps. The Eighth Circuit Court of Appeals reached a similar conclusion, with both courts saying the contracts fall under state gambling rules.

The Third Circuit Court of Appeals, however, ruled differently, finding that the CFTC does have proper jurisdiction over these markets. The split means the issue remains unsettled at the federal level, and legal experts have suggested the U.S. Supreme Court may eventually need to decide the matter if the appellate divide persists. Until the higher courts resolve it, the same contract can be treated one way in some parts of the country and another way in others.

Review Process and Open Questions

Both rules submitted this week are under review at the White House Office of Management and Budget. This review step usually comes right before a rule opens for public comment. One of the measures is an interim final rule, which would take effect right away, meaning part of the redefinition could be in force while the court cases are still pending. It would still remain open for public input and possible changes after that.

The CFTC has not released detailed text of either rule yet. In its filing, the agency said only that neither rule is considered “economically significant,” a designation that matters because rules flagged as economically significant face heightened regulatory scrutiny. The unpublished text is the detail to watch: the exact wording will determine where the new line between financial product and gambling product is drawn.

A Regulator Acting Alone

CFTC Chairman Mike Selig has been acting as the agency’s only commissioner. President Trump has not yet nominated members to fill the remaining seats, meaning Selig has been making regulatory decisions without input from other commissioners. Under normal circumstances, the agency is structured to have five members.

Separate from the two prediction market rules, the CFTC has also submitted a “prerule” focused on crypto regulation. The agency has not shared specific details about what that prerule will cover.

What Comes Next

The outcome of these rule changes could affect the ongoing lawsuits between the CFTC and several states. If event contracts become legally defined as swaps rather than gambling, it may weaken the states’ legal arguments in current cases. The near-term markers are the release of the full rule text, the opening of the public comment period, and how the appellate split plays out in the courts.

This article was originally published on CoinCentral.