The CFTC wants to push “event contracts” into the definition of swaps. The significance of this classification is that it argues: federal law has exclusive jurisdiction over swaps traded on the exchange(s) it regulates.
Under this theory, the contract is first deemed a swap, and then falls under the federal oversight of the exchange it regulates. Prediction markets like Polymarket and Kalshi would therefore fall under federal jurisdiction. The states don’t agree—especially for sports—so they continue to treat them as state gambling laws. The dispute is therefore about jurisdiction, not the contract itself.
Under this theory, the contract is first deemed a swap, and then falls under the federal oversight of the exchange it regulates. Prediction markets like Polymarket and Kalshi would therefore fall under federal jurisdiction. The states don’t agree—especially for sports—so they continue to treat them as state gambling laws. The dispute is therefore about jurisdiction, not the contract itself.