CFTC Draws the Line Between Prediction Markets and Gambling in New Rules

The Commodity Futures Trading Commission is pressing its claim over prediction markets, issuing a pair of measures Friday that would formally define event contracts as “swaps” under federal law while carving out traditional gambling. The first, a proposed rule opened for public comment, would expressly expand the definition of “swap” to include event contracts, including those tied to sports, politics, cultural events and weather. The CFTC said the contracts are financial instruments “commonly known to the trade as swaps” and that the move resolves any ambiguity about their status.