CFTC rules casino and sportsbook bets are not swaps

The US Commodity Futures Trading Commission (CFTC) has adopted a rule stating that bets placed with state- or tribal-licensed casinos and sportsbooks are not "swaps", the derivatives it regulates. The interim final rule, announced on 9 October 2026, takes effect when it is published in the Federal Register. On the same day the agency proposed a second rule that goes the other way for prediction markets: event contracts on sports, politics, culture and weather would be swaps, under federal oversight.

"Casino-style gambling products are not derivatives," said CFTC Chairman Michael S. Selig.

What the interim rule says

The rule adds a new paragraph to the CFTC's definition of "swap". A bet falls outside that definition when two conditions are met:

• it is offered by someone licensed or authorised to offer gambling or accept wagers under state law, or under the law of a federally recognised tribe through the Indian Gaming Regulatory Act, acting within that licence, and the bet is regulated as gambling under that law; and
• it is not traded on an exchange, a swap execution facility or any other market where trades are executed between many parties or individually negotiated.

The rule then names three examples: sports wagers accepted by a licensed sportsbook, casino games (table games, slot machines and other electronic gaming devices) offered by a licensed casino operator, and other licensed games of chance such as bingo, pool wagering, lotteries and raffles.

An interim final rule applies straight away, without the usual comment round first. This one takes effect on the day it is published in the Federal Register, and comments are due within 30 days of that publication. The CFTC says it had "good cause" to skip prior comment, citing conflicting court rulings and state enforcement actions against prediction markets. The agency also says the rule "would not change the legal rights or obligations of market participants", because it already treats casino-style gambling as outside its jurisdiction. Its stated aim is to reduce "interpretive uncertainty".

What the proposed rule says

The second action is only a proposal. It would add one line to the swap definition: "Event contracts, including those based on sports-, politics-, cultural, and weather-related events." Comments will be accepted for 30 days after the proposal is published in the Federal Register, and a final rule would be needed before it applies.

"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," Selig said.

Why the CFTC is drawing this line

The two actions respond to a split between federal appeals courts over sports event contracts sold by Kalshi and similar exchanges. The Third Circuit ruled in April that Kalshi's sports contracts are likely swaps under the CFTC's exclusive jurisdiction. The Ninth Circuit, in a Nevada case in August, and the Sixth Circuit, in cases involving Ohio and Tennessee in September, went the other way.

The interim rule quotes the Sixth and Ninth Circuits' worry that, if a sports event contract is a swap, every sportsbook bet would be one too. The CFTC calls that premise "erroneous". It says the rule "implements the Third Circuit's suggested approach", which pointed to the regulators' power to "further define" swaps.

The distinction the CFTC relies on is structural. At a sportsbook, the operator sets the odds and takes the other side of the bet. On an exchange, contracts trade on an order book at prices set by buyers and sellers, and are cleared through a clearinghouse. The agency accepts that "a person can achieve similar economic exposure" either way, but argues that does not make the two the same product.

TD Cowen policy analyst Jaret Seiberg, quoted by CoinDesk, reads the interim rule as "designed to improve the agency's position in court". CoinDesk also reports that Selig is currently the only sitting commissioner on what is meant to be a five-member commission.

The Supreme Court case in the background

New Jersey has asked the US Supreme Court to hear its dispute with Kalshi. On 7 and 8 October, 39 states and the District of Columbia, and separately the NFL, filed briefs backing that request. Kalshi's response is due on 9 November, according to SBC Americas. The court has not decided whether to take the case.

Neither action settles that fight on its own, NextPredict notes: courts still decide what the Commodity Exchange Act means. The Sixth Circuit also held that Ohio and Tennessee gambling laws would not be pre-empted even if Kalshi's contracts were swaps.

What it means for players

Nothing changes today for people who bet with a state-licensed US sportsbook or play at a licensed online or land-based casino. Those products stay under state or tribal gambling regulators, as before. The argument is about prediction-market contracts: whether a sports contract bought on a federally registered exchange is a federal derivative or a bet under state gambling law. One practical difference is age: the NFL's brief to the Supreme Court notes that most states require sports bettors to be 21, while prediction markets accept 18-year-olds, SBC Americas reports. The rule covers the United States only.

For earlier steps in this dispute, see Missouri AG orders six prediction markets to stop and Tunica-Biloxi announces SaltTrade Derivatives.

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