CFTC Sends Prediction Market Event Contract Rules to White House for Review

Two CFTC prediction market event contract rules are now with the White House, sent to the Office of Information and Regulatory Affairs on Sept. 28 for review, Gambling Insider reported. Both filings turn on the definition of a swap, the legal hinge for the agency's jurisdiction over prediction markets, and they arrive days after another appeals court ruled against it.

What the two CFTC drafts would change

RIN 3038-AF82 is titled "Further Definition of 'Swap' to Include Event Contracts" and would broaden the swap definition to cover event contracts. RIN 3038-AF81 would define swaps to "Exclude Casino-Style Gambling Products." Neither is classified as economically significant. The first would move through the proposed rule process; the casino measure is listed at the interim final rule stage rather than as a proposed rule.

iGB reported the gaming rule would bar designated contract markets from listing contracts on online casino products such as blackjack and craps. In a June rule proposal, the CFTC took a broad view of what counts as "gaming," naming roulette along with games of skill including poker and chess, according to Gambling Insider. The full text of both drafts will not be public until they are released, so where the line falls is still unknown, and the timetable for the next stages is not immediately clear.

Courts are split on the swap question

The Third Circuit sided with Kalshi in New Jersey. The Ninth and Sixth circuits later rejected similar arguments covering contracts in Nevada, Ohio and Tennessee. Last week the Sixth Circuit ruled for Tennessee, reversing a lower court decision, iGB reported. Kalshi began listing event contracts in Tennessee in 2025, arguing they met the swap standard.

The Ninth Circuit also ruled that sports contracts entered from Tribal lands can amount to Class III gaming under the Indian Gaming Regulatory Act. New Jersey, Robinhood and Crypto.com are seeking Supreme Court review of related rulings. Bill Miller, president of the American Gaming Association, told a Global Gaming Expo panel in Las Vegas that the dispute is likely headed to the Supreme Court.

The DOJ's answer in the Green Beret case

The Justice Department is making a parallel argument in a criminal prosecution. Prosecutors made the case in a Sept. 30 letter to Judge Margaret Garnett in the Southern District of New York, as Casino.org reported. They wrote that defense claims about courts ruling binary event contracts "are likely not swaps" misstate the law. The Sixth and Ninth Circuit decisions addressed "only sports event contracts" and civil preemption issues, they said, and even under that narrower reading the contracts at issue qualify as swaps because they are "inherently economic."

The defendant is Master Sgt. Gannon Ken Van Dyke, accused of using classified information to make $409,000 trading Polymarket contracts on when Venezuelan President Nicolás Maduro would leave power. He faces three Commodity Exchange Act counts, each carrying up to 10 years, plus wire fraud and an unlawful monetary transaction. Oral arguments are scheduled for Oct. 7.

Industry pressure and what comes next

At G2E, the AGA and the Indian Gaming Association restated their opposition to prediction markets. The AGA estimates states have lost more than $1 billion in tax revenue to the sector. Miller's assessment of the fight was blunt: "The only way we lose is if we take our foot off their throat."

In the Senate, the Protect College Sports Act passed 77-22 on Monday. The bill from Texas Senator Ted Cruz lets conferences and athletic associations bar an athlete from college competition if the athlete bets on sports or trades sports event contracts. It now goes to the US House of Representatives.