CFTC Proposes Rules to Classify Event Contracts as Swaps

The U.S. Commodity Futures Trading Commission (CFTC) has submitted two rules to the Office of Management and Budget (OMB) for review. One proposal seeks to include event contracts under the regulatory definition of swaps, while the other is an interim final rule intended to exclude "casino-style gambling products" from swap classification. These rules, received by the OMB on September 28, come amid ongoing legal disputes regarding the CFTC's jurisdiction over prediction markets. While some courts have ruled that certain event contracts are subject to state gambling laws, CFTC Commissioner Mike Selig maintains that the agency holds sole jurisdiction. Additionally, the OMB disclosure indicates that the CFTC has submitted a pre-rule focused on cryptocurrency regulation.