CFTC Sends the White House Rules to Define Event Contracts as Swaps and Exclude Casino Games

The Commodity Futures Trading Commission has asked the White House to clear a rule defining event contracts as swaps, the classification on which its claim to exclusive jurisdiction rests, and a second that would exclude "casino-style gambling products" with immediate effect. Neither text is public, and both arrive days after a second federal appeals court rejected the swaps argument.

• The White House Office of Information and Regulatory Affairs (OIRA) received two Commodity Futures Trading Commission (CFTC) rules on 28 September: a proposed rule titled Further Definition of "Swap" to Include Event Contracts, and an interim final rule titled Further Definition of "Swap" to Exclude Casino-Style Gambling Products
• Both remained under review on 2 October, according to OIRA's own listing; neither has been published in the Federal Register or announced by the CFTC, so their text, scope and any comment period are not yet known
• The interim final rule could take effect on publication without prior public comment, while the event-contract rule would go out for comment first; OIRA lists neither as economically significant
• The swap question is the one courts have been deciding against Kalshi: the Sixth Circuit ruled 3-0 on 25 September that its sports contracts are not swaps, following the Ninth Circuit in August, while the Third Circuit sided with Kalshi in April
• Separately, the CFTC told the Ninth Circuit on 24 September that it expects its revised rule on gaming contracts, 17 C.F.R. § 40.11, to become final within two months

The CFTC Asks the White House to Settle by Rule What Courts Are Settling Case by Case

The Commodity Futures Trading Commission has sent the White House two rules aimed at the definition at the centre of the fight over prediction markets. OIRA's list of rules under executive review, dated 2 October, shows both received on Monday 28 September. RIN 3038-AF82, Further Definition of "Swap" to Include Event Contracts, is at the proposed rule stage. RIN 3038-AF81, Further Definition of "Swap" to Exclude Casino-Style Gambling Products, is at the interim final rule stage. OIRA records neither as economically significant and flags both as Dodd-Frank Act rules.

That is all that is on the public record. The CFTC has issued no press release; its latest, on 1 October, concerned Brexit-related no-action relief. Nothing has appeared in the Federal Register or on its public inspection list. Several trade headlines said the CFTC had "proposed" rules to claim exclusive jurisdiction, but the titles say nothing about pre-emption of state law, and the content of both rules will not be known until OIRA clears them and the agency publishes. Independent agencies such as the CFTC have had to send significant rules to OIRA before publication since President Trump's Executive Order 14215 of February 2025.

The two stages matter. A proposed rule is published for public comment before the agency can finalise it. An interim final rule takes effect when published, with comments taken afterwards, a route the Administrative Procedure Act allows only where an agency finds good cause to skip prior notice and comment. Gaming lawyer Daniel Wallach said the interim status could increase the risk of a challenge under the Act, and that the casino rule could prompt immediate litigation if it goes beyond excluding casino-style products and effectively authorises sports event contracts, according to CasinoBeats.

Why the Word "Swap" Carries the Whole Dispute

The Commodity Exchange Act gives the CFTC exclusive jurisdiction over swaps traded on the exchanges it registers. Kalshi and other designated contract markets have argued that sports event contracts are swaps, and that state gambling laws cannot reach them. The courts have split. The Third Circuit accepted that view in New Jersey's case in April. The Ninth Circuit rejected it in Nevada's case in August, and on 25 September the Sixth Circuit did the same for Ohio and Tennessee, holding that a sporting result does not carry the inherent "financial, economic, or commercial consequence" the statutory definition requires. The Sixth Circuit added that Kalshi's reading would "attach criminal penalties to a breathtaking amount of commonplace [gambling] activity", and that even if the contracts were swaps, federal law would not pre-empt state gambling law.

The question is now before the Supreme Court. Kalshi's response to New Jersey's petition, No. 26-299, is due on 9 November, and Nevada's responses to the petitions from Robinhood and Crypto.com are due on 14 and 15 October. Kalshi's petition for rehearing en banc of the Nevada decision is pending in the Ninth Circuit. The CFTC has gone to court against states in its own name, including a motion to block Connecticut in September.

A Third Rule on Gaming Is Due Within Two Months

The swap rules sit alongside a separate rulemaking that has been public since June. The CFTC proposed amendments to its rule on event contracts involving gaming, 17 C.F.R. § 40.11, on 12 June, with comments closing on 27 July. The proposal would define "gaming" and set factors for deciding when an event contract is contrary to the public interest and may not be listed; Gambling Insider reports that it took a broad view of gaming, citing casino games such as roulette and games of skill including poker and chess. In a filing in its Ninth Circuit case against Arizona on 24 September, the CFTC said it "expects that its revised version of 17 C.F.R. § 40.11 will become final within the next two months". That final rule does not appear on OIRA's review list as of 2 October. A third CFTC item under review, received on 17 September, concerns crypto asset markets.

No reaction from state regulators or the American Gaming Association to the two filings had been published by Friday.

The Casino Carve-Out Reads as an Answer to the Courts' Strongest Point

The interim final rule is the more revealing of the two. Excluding casino-style products from the definition of a swap is a narrowing, not an expansion, and the CFTC wants it in force at once. The most damaging line in the Sixth Circuit opinion was that Kalshi's reading of the statute had no limiting principle and would turn ordinary gambling into federally regulated swaps. A rule that says, in terms, that casino-style gambling products are not swaps gives the CFTC and the exchanges a limit to point to before the Supreme Court decides whether to hear the question. It would also speak to the casino industry, where, Gambling Insider reports, the prospect of exchanges moving into casino-style products has raised concerns. The risk, as Wallach notes, is in the drafting: a rule that excludes casino games by name may be read as an implied statement that everything else, sports included, is in.

An Agency Definition Will Struggle to Overturn a Statutory Holding

The event-contract rule is a slower instrument with a harder task. Both appellate courts that ruled against Kalshi did so on the words of the Commodity Exchange Act, and since the Supreme Court's 2024 decision in Loper Bright courts no longer defer to an agency's reading of an ambiguous statute. The CFTC's best argument is that Congress expressly told the regulators to "further define" the term swap in section 712(d) of the Dodd-Frank Act. But that provision assigns the task to the CFTC and the Securities and Exchange Commission jointly, in consultation with the Federal Reserve, which is how the 2012 rule that first further defined swaps was made. OIRA's entries name only the CFTC, and whether the SEC is a party will not be clear until the text is published. A proposed rule will also take months to finalise after comment, which puts it behind the Supreme Court's decision on whether to take the case.

For Operators, the Timetable Is the Story

Nothing in either filing changes what a state can do today. Ohio and Tennessee have a binding appellate ruling, Nevada has one awaiting the full Ninth Circuit, and the self-certified products exchanges are listing, from sports contracts to deposit and trading rewards worth up to $5,000 a customer, remain exposed there. What has changed is that the CFTC is now committing to a regulatory record that the Supreme Court, Congress and the states will all have to read. If OIRA clears the casino rule quickly, it could be in force within weeks. The swap rule will run on a longer clock.

The CFTC is trying to write into regulation the answer it has lost in two appeals courts. Until the text is published, the only certainty is that the agency intends to keep casino games out of the argument and sports in it.