- Details
- By Chez Oxendine
- Gaming
The Commodity Futures Trading Commission has sent two proposed regulatory changes to the White House that could strengthen its effort to regulate prediction markets, as tribes and states challenge sports event contracts.
The White House Office of Information and Regulatory Affairs received both measures Sept. 28. A proposed rule would explicitly include event contracts in a definition of “swap,” a financial instrument that’s regulated under the Commodity Exchange Act. A separate interim final rule would exclude casino-style gambling products from that definition. Both remain under review. The full texts are not included in the public filings, so the details of how the measures would treat sports contracts are not yet available.
Together, the measures would bolster the CFTC’s argument that it should have exclusive oversight of event-contract platforms, a position tribes and states have challenged in court.
The proposed definition follows multiple setbacks in the agency’s push to reclaim sole jurisdiction over prediction markets, which have grown explosively in the last two years and threaten tribal gaming revenues, per prior Tribal Business News reporting.
On Sept. 25, the Sixth Circuit ruled that Kalshi had not shown its sports contracts qualified as swaps and allowed Ohio and Tennessee to enforce their gambling laws, Reuters reported.
Separately, the Ninth Circuit found Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians likely to succeed in challenging Kalshi’s unauthorized sports wagers on their lands under the Indian Gaming Regulatory Act. The court returned the case to district court to consider a preliminary injunction.
Brian Edwards contributed reporting.
