CFTC proposals aimed at separating prediction markets from casino gambling

The two measures attempt to set the stage for a potential US Supreme Court battle over federal and state jurisdiction. The Commodity Futures Trading Commission (CFTC) has issued two proposals, one that would define event contracts as “swaps” under federal law and another that excludes traditional casino gambling from that definition. Several states have sued prediction-market operators, including Kalshi and Polymarket, alleging illegal gambling, and the CFTC has countersued to defend its federal jurisdiction over event contracts, which it claims are beyond the purview of state regulators.