CFTC Proposes Classifying Event Contracts as Swaps to Counter State Gambling Claims

The Commodity Futures Trading Commission (CFTC) submitted two rule proposals to the White House on September 29 to formally classify event contracts as swaps under the Commodity Exchange Act. This move aims to establish federal jurisdiction and oversight, challenging arguments from states like Arizona, Nevada, and Massachusetts that these products constitute illegal gambling under state law. The proposals follow previous regulatory actions, including a June 10 notice regarding Regulation 40.11 and May 13 no-action relief for swap data reporting.