The proposed paragraph names sports, politics, cultural and weather events, and a companion interim final rule issued the same day puts casino-style gambling outside the definition. The agency adopts the Third Circuit's reasoning and argues against the Ninth and Sixth Circuits, in a dispute the Supreme Court has been asked to settle.
The Commodity Futures Trading Commission proposed on Friday to add event contracts to the regulatory definition of a swap, and issued a separate interim final rule the same day confirming that casino-style gambling products sit outside it. Taken together, the two instruments draw a line between a regulated derivative and a bet that three federal appeals courts have drawn in different places this year.
The proposal would add a paragraph to the definition of "swap" in the agency's own rules at 17 CFR 1.3. The new text reads: "Event contracts, including those based on sports-, politics-, cultural, and weather-related events." The list is not exhaustive, and the document proposes no other regulatory language. The Commission says it is acting to resolve any ambiguity about instruments it describes as "commonly known to the trade as swaps."
Two categories are left out. Casino-style gambling products are handled by the companion rule rather than this one, and event contracts that already qualify as futures, or that are security-based swaps regulated by the Securities and Exchange Commission, fall outside the proposal's reach.
The interim final rule codifies a position the Commission says it has held for years, that wagers placed on sportsbooks and on casino games are not swaps. Chairman Michael Selig's statement was blunt: "Casino-style gambling products are not derivatives." He presented the codification as marking the limits of the agency's authority over products the states have historically regulated. Unlike the proposal, it takes effect as soon as it appears in the Federal Register, with comments accepted for 30 days after that.
The CFTC rests the event-contracts proposal on several footings. Section 712(d) of the Dodd-Frank Act requires the agency and the SEC jointly to further define "swap," in consultation with the Federal Reserve Board, and the proposal treats that further-definition power as an independent basis in its own right. It also invokes three prongs of the statutory definition in the Commodity Exchange Act: the clause reaching an instrument tied to a potential financial, economic or commercial consequence, the clause reaching anything commonly known to the trade as a swap, and the binary-option clause. The statute's special rule for event contracts, the proposal argues, already contemplates that such contracts are swaps.
Much of the document is spent on the courts. The Third Circuit held in April, in Flaherty, that sports event contracts listed on a designated contract market are swaps, and the proposal adopts that reasoning. The Ninth Circuit held in August, in Assad, that they likely are not; the CFTC's answer is that the ruling turned on concerns about casino-style gambling the proposed rule does not reach, and that the agency's own Rule 40.11 does not support the outcome. The Sixth Circuit held in September, in Schuler, that a game result carries no financial consequence of its own. The proposal responds that the statute asks only about a potential consequence, a standard it reads broadly, and that sports events carry one.
Those are the agency's characterizations of the decisions and its own arguments against two of them, not a court's. The same question sits at the Supreme Court in a petition the justices have not yet acted on. New Jersey's filing in Flaherty v. KalshiEX asks whether federal derivatives law displaces state sports betting rules. The National Football League asked the justices to take the case on Thursday, a day after Ohio, 38 other states and the District of Columbia filed a brief of their own, and Kalshi's response is not due until November 9.
Comments on the proposal are due 30 days after Federal Register publication, under RIN 3038-AF82. Neither release says when that will happen, so no deadline date exists yet. Neither records a vote. The proposal states only that the Commission approved it, and carries the signature of Christopher Kirkpatrick, its secretary. The agency's commissioners page lists a single sitting member, Selig, sworn in on December 22, 2025, against a Commission the same page describes as consisting of five. Cointelegraph reported on October 7 that Selig is both chairman and sole commissioner, and counted seven vacant leadership seats across the CFTC and the SEC.
An advance notice on Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets came out on October 5, the public stage of the package that reached the White House on September 17 under RIN 3038-AF80. That docket is separate from this one. Both followed the Senate's refusal on September 15 to open debate on the CLARITY Act, a 49-50 cloture vote, with the chamber not back until November 9.
Until the Federal Register publishes them, the exclusion for casino games has not taken effect and the comment clock on event contracts has not started.
