CFTC Pushes White House to Classify Prediction Markets as Swaps Amid Kalshi Court Battles

The Commodity Futures Trading Commission has submitted two rules to the White House's Office of Management and Budget to redraw the legal definition of swaps to include event contracts. An accompanying interim final rule specifically redefines the term to exclude "casino-style gambling products." The filings arrived at the OMB on September 28, just days after the Sixth Circuit ruled Kalshi failed to prove its sports contracts qualified as swaps under current law. This regulatory push responds to a fractured legal landscape, with the Ninth and Sixth Circuits ruling against federal preemption for prediction markets, while the Third Circuit previously backed Kalshi. New Jersey has formally requested the Supreme Court to resolve the jurisdictional conflict between prediction platforms and state gaming authorities. A third CFTC item regarding crypto asset transactions and market regulation has also been pending at the OMB since September 17. "Presents an opportunity to address longstanding ambiguities within Title VII of Dodd-Frank that have stifled fair competition and responsible innovation." — Michael Selig