The new proposal released by the CFTC defines contracts whose profits are determined by the outcomes of sports contests and other events as “swaps.” The measure codifies the inherently speculative nature of the prediction market and is intended to resolve conflicts between the federal government and regulatory agencies.
The proposal was announced on the 9th (current time). The CFTC stated that the rule expands the regulatory authority over the prediction market by using the term “swap.” Previously, the definition of a swap had been interpreted as encompassing various event contracts; this amendment broadens the scope to include not only sports contests but also contracts linked to political, cultural and economic events.
The conflict between the federal government’s supervisory power and the regulatory agencies is a key issue. Some federal officials consider contracts tied to sports outcomes as actual gambling and argue that regulatory measures are required. The CFTC stresses that such contracts fall under the definition of a swap and that the regulatory agency’s authority can prevail. The U.S. 6‑9 Regulatory Tribunal ruled that sports event contracts were gambling and directed a prediction‑market platform to comply. However, the 3rd Regulatory Tribunal recognized these contracts as swaps and upheld the CFTC’s authority.
The federal government’s regulatory push continues. New York has alleged that the policy market operates an illegal gambling enterprise and filed a related lawsuit. Meanwhile, the CFTC announced a temporary rule stating that casino‑style betting products are not included in swaps, clarifying the distinction between sports betting and casino games.
These actions have prompted the National Football League (NFL) to claim that the policy market and other prediction‑market platforms violate sports betting laws, and it submitted a support opinion to the federal court. In addition, Robinhud has petitioned the regulatory tribunal to recognize the CFTC’s exclusive authority.
The rule is not yet finalized and will require public comment and subsequent procedural steps. The outcome of ongoing legal disputes may also influence the regulatory framework for prediction markets.