CFTC Event Contracts & Prediction Markets Public Interest Determinations

Current understanding

The CFTC is proposing amendments to Part 40 to specify the factors it will use when determining whether event contract derivatives (including prediction markets) are contrary to the public interest and therefore prohibited from being listed, traded, or cleared on CFTC-registered entities. The proposal would define ‘gaming’ and clarify when a contract ‘involves’ an underlying activity (such as gaming, war, terrorism, assassination, or unlawful activity) enumerated in CEA §5c©(5)©. Status: proposed rule; not yet final.

Evidence log

• 2026-10-29 — To amend the Commodity Exchange Act to prohibit the listing of contracts relating to wildfires.: cross-connection with wildfire-commodity-contracts: Wildfire-contract ban would statutorily foreclose a category of event contract that CFTC otherwise evaluates case-by-case under its public interest framework. (novelty: 2)
• 2026-10-19 — Further Definition of “Swap” To Exclude Casino-Style Gambling Products: cross-connection with swap-security-based-swap-definitions: The gambling-exclusion rule draws the boundary opposite to CFTC event-contract/prediction-market jurisdiction—sports and casino bets are explicitly non-swaps while event contracts on similar outcomes remain within CFTC authority. (novelty: 2)
• 2026-10-19 — Further Definition of “Swap”-Inclusions: Companion CFTC proposal to amend the ‘swap’ definition to expressly cover sports, political, cultural, and weather event contracts, pulling prediction-market products squarely into the swap regulatory regime (proposed rule). (novelty: 3)

Open questions

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