Will SCOTUS take up prediction markets case after CFTC issues proposed rules on swaps?
By The Weekly Edge desk ·
Summary
The CFTC issued a notice of proposed rulemaking on 9 October that would explicitly bring event contracts tied to sports, politics, culture and weather within the definition of swaps, while carving out casino-style games. The move comes amid a circuit split: the Third Circuit sided with the CFTC in KalshiEX v Flaherty, the Ninth Circuit found Kalshi's sports contracts are not swaps, and the Sixth Circuit held that even if they were, state gambling laws would not be pre-empted. Comments are due 30 days after Federal Register publication, and the dispute could reach the Supreme Court.
Why it matters
The proposed swap definition and conflicting circuit rulings leave the status of event contracts and state gambling laws unsettled.