CFTC Moves to Classify Event Contracts as Swaps — Attempting to Settle the Core SCOTUS Question by Rule

The Commodity Futures Trading Commission moved on October 9, 2026 to explicitly classify event contracts as swaps under the Commodity Exchange Act. The action, announced by Chairman Michael Selig, amends the regulatory definition of a swap to encompass event contracts, placing prediction market products under the federal swap-regulation framework the CEA reserves to the CFTC's exclusive jurisdiction. The scope covers sports, political, cultural, and weather contracts; a separate provision excludes casino-style gambling and traditional sportsbook wagers, drawing a line between event contracts on a designated contract market and conventional gambling. Selig said the aim is to remove 'any ambiguity regarding these contracts.' Coverage differed on the precise procedural form — interim final rule versus proposed rulemaking — so the operative designation should be confirmed against the primary notice on cftc.gov.

For UK readers, this is the US equivalent of the FCA issuing a rule declaring that a contested product definitively falls within its regulatory perimeter — except that here the CFTC is doing so while courts are actively split on whether the governing statute actually reaches these products. The question of whether event contracts are 'swaps' is the exact question dividing the circuits: the Third Circuit held they are swaps (CFTC exclusive jurisdiction, state law preempted); the Ninth and Sixth Circuits held they are not (state gambling regulation applies). That split is the basis for the cert petitions now at the Supreme Court. By classifying event contracts as swaps by rule, the CFTC is attempting to resolve the precise question the courts are split on, in the direction that favours the platforms and its own claim of exclusive jurisdiction.

Whether the rule settles the question is contested. US courts generally defer to an agency's reasonable interpretation of a statute it administers, but that deference narrowed sharply after the Supreme Court's 2024 decision in Loper Bright v. Raimondo, which overturned the Chevron doctrine of broad deference. Under the post-Chevron framework, courts decide statutory meaning themselves and weigh agency interpretations only insofar as they are persuasive. A CFTC rule declaring event contracts to be swaps does not bind the Supreme Court's independent reading of whether the CEA's swap definition reaches them — the Sixth and Ninth Circuits have already concluded it does not, and a late-arriving rule asserting the opposite may be seen as the agency manufacturing the jurisdiction it is litigating to defend. The rule strengthens the CFTC's position but does not eliminate the legal question.

The timing places the rule in an intensely active moment. The Supreme Court amicus deadline passed on October 8, producing briefs from the NFL, 39 state attorneys general, 145 tribal governments and organisations, and the American Gaming Association, all urging the Court to take the case and rule against the platforms. The CFTC's rule, issued the next day, is the federal government's institutional counterweight. It also arrives amid reporting on political entanglements between the platforms and the current administration, which critics will cite as evidence the CFTC is protecting politically connected companies rather than interpreting the statute neutrally. Defenders will note the CFTC has asserted exclusive jurisdiction over event contracts since before the current controversy, and that formalising that position in a rule is a legitimate exercise of its authority. The landscape now features a direct confrontation: a federal agency rule classifying the contracts as swaps, against two circuit rulings holding they are not, with the Supreme Court poised to decide which interpretation governs.

Operators mentioned in this article

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Kalshi

First fully CFTC-regulated US event-contract exchange.

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Polymarket

USDC-settled on Polygon. Largest prediction market by volume.

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