The U.S. Commodity Futures Trading Commission is making its pursuit of exclusive prediction markets authority a formal effort, putting a new definition in place on Friday and proposing other changes that collectively seek to secure the legal footing of events contracts as "swaps" — a transaction under the CFTC's authority and outside of state gambling regulators' reach.

The CFTC is trying to define the kind of sports wagering that are not swaps — contractual exchanges between parties that falls into the agency's federal jurisdiction — while maintaining that event contracts still fit the definition of swaps under the law, and as a result belong in CFTC oversight. Casino-style gambling will be held outside that swap definition, according to the interim final rule issued by the agency. And event contracts belong well within that swaps definition, the CFTC proposed in a related rule.

The "interim final" status of the one rule means it becomes immediate policy but will be open for public input as it's implemented. The other rule proposal explicitly folds "event contracts, including those based on sports, politics, cultural, and weather-related events" that are routinely traded on such firms as Kalshi and Polymarket into the existing U.S. regulation of swaps, but that rule effort is in the proposal stage, with a relatively brief 30-day comment period.

S. Supreme Court, which has been asked to resolve the issue.

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