CFTC’s proposed rules define federal regulatory authority over event contracts

The Commodity Futures Trading Commission (CFTC) has strengthened its oversight over prediction markets, issuing two proposals that would formally define event contracts as “swaps” under federal law, while prohibiting traditional gambling. The first proposed rule would expand the definition of “swap” to include event contracts, including those tied to cultural events, weather, politics, and sports. In a statement, the CFTC notes that these contracts are financial instruments that are commonly known to the trade as swaps and proposes to resolve any ambiguity regarding these contracts.