CFTC Puts Prediction Markets Inside Swap Rules, Exempts Gambling

Sports, politics and weather contracts would sit inside the Commodity Futures Trading Commission’s definition of a “swap” under a proposed rule issued Friday. In a separate interim final rule, effective immediately upon publication, the agency would exclude casino-style gambling products.

The CFTC’s two measures formalize proposals sent to the White House for review in September. Each carries a 30-day comment window, leaving prediction-market operators and their counterparties with a defined period to challenge or shape the text.

The distinction matters for Kalshi and for similar crypto-based prediction platforms. Event contracts tied to sports, politics, cultural events and weather would be treated as commodity derivatives under the CFTC’s proposed definition. Sportsbook wagers and casino games would be outside that definition under the interim rule.

Michael Selig, chairman of the CFTC, described the agency’s position in jurisdictional terms: “These products are commodity derivatives squarely within the CFTC’s regulatory remit under the Commodity Exchange Act and are within the agency’s exclusive jurisdiction.” On casino products, Selig said, “Casino-style gambling products are not derivatives.”

The agency’s action comes as prediction markets face disputes with states over whether their contracts amount to illegal gambling. The new measures put the CFTC’s position into formal rulemaking: event contracts fall within its authority, while casino-style products do not.

For traders, the immediate consequence is procedural rather than a new payout rule. The two 30-day comment windows are now the deadline for submissions on the proposed framework, while the gambling exclusion takes effect upon publication. The final treatment of edge cases remains open, including how the CFTC will draw the line between a derivative event contract and a gambling product.

The wagers total $173: $19 placed at about 10:42 p.m. ET on Thursday, $74 at around 1:41 p.m. Friday, and $80 at around the same time. Their listed payouts were $1,896, $3,689 and $4,023 respectively, which sum to $9,608. The discrepancy between the stated “about $9,600” and the itemized total is eight dollars.

Trump confirmed Zacharia’s appointment in a Truth Social post Friday afternoon, writing, “I am confident that Katie will deliver strong results for our Country.” Kalshi traders had assigned her about a 1% chance in the days before reports of her selection.

The episode follows two earlier Kalshi-related enforcement actions listed in the reporting. In August, former White House teleprompter operator Gabriel Perez agreed to repay $107,539 in profits and pay a $65,000 civil penalty to settle CFTC charges. On August 31, Kalshi permanently banned former Rep. George Santos over trades tied to his State of the Union attendance and fined him just over $71,000.

Those cases concern trading conduct. Friday’s rules address classification and jurisdiction. On the desk’s read, that is the larger consequence for crypto prediction markets: contracts tied to real-world events could be pulled toward the CFTC’s swap framework, while casino-style products would be excluded, with the final boundaries dependent on the comment process and subsequent rulemaking.