CFTC Codifies Rule Stating Casino-Style Wagers, Including Sports Bets, Aren’t Swaps

In what prediction market and sports betting industry insiders are calling a late Friday surprise, the Commodity Futures Trading Commission (CFTC) announced that it is codifying a rule clarifying that “casino-style gambling products” do not fall under the definition of a swap. The commission, which regulates yes/no exchanges, maintains that event contracts are in fact swaps. That distinction is likely why it pushed operators to cease quoting sports event contracts in a fashion similar to traditional sports wagers. The commission noted that the Interim Final Rule (IFR) will be subject to a 30-day public comment period.