CFTC Proposes Event Contracts as Swaps, Excludes Wagers

The Commodity Futures Trading Commission proposed defining event contracts tied to sports, politics, cultural events and weather as swaps, while issuing a separate interim final rule excluding sportsbook and casino wagers from that category. The measures, announced October 9, set out the agency’s view of where federal derivatives oversight ends and traditional gambling begins. The proposed inclusion is not final. It would provide for a 30-day public comment period after publication in the Federal Register. The interim final exclusion takes effect upon Federal Register publication and also allows 30 days for comments. The publication date was not specified. CFTC Chairman Michael Selig said event contracts are commodity derivatives within the agency’s exclusive jurisdiction under the Commodity Exchange Act. He described the casino and sportsbook products covered by the exclusion as outside the swap definition. The agency said the event-contract proposal is intended to clarify their status under federal law. The distinction matters in disputes over whether states can enforce gambling laws against prediction-market operators.