CFTC Proposes to Expand Definition of Swaps to Include Prediction Markets Trading
By Katherine Hamilton
The Commodity Futures Trading Commission is proposing to provide what it describes as additional clarity on the term "swap" that would include event contracts used in prediction market trading.
The expanded term would encompass event contracts on sporting, political, cultural and weather-related events, the CFTC said in a statement Friday.
The proposal notes that event contracts are financial instruments commonly known to trade as swaps.
The prediction markets industry, which is regulated by the CFTC, has been enmeshed in a debate about whether trading on events constitutes gambling, which would put it under the legal purview of states. The CFTC has said that the emerging industry is a form of financial trading, not betting.
"These products are commodity derivatives squarely within the CFTC's regulatory remit under the Commodity Exchange Act and are within the agency's exclusive jurisdiction," CFTC Chair Michael Selig said.
The agency is seeking public comment on the proposal. Comments must be submitted within 30 days.
Write to Katherine Hamilton at katherine.hamilton@wsj.com
(END) Dow Jones Newswires
October 09, 2026 17:27 ET (21:27 GMT)
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