CFTC Excludes Casino Gambling From Swaps and Targets Event Contracts

The Commodity Futures Trading Commission excluded casino-style gambling from the federal swap definition while proposing to classify sports, political, cultural and weather event contracts as swaps.

The interim final rule covers wagers placed through sportsbooks and casino games. The CFTC said those products are not derivatives.

Separately, the commission proposed expressly defining certain event contracts as swaps under the Commodity Exchange Act. The proposal describes the contracts as financial instruments used to hedge risks, speculate and provide information about future events.

CFTC Chairman Michael S. Selig said event contracts are commodity derivatives within the agency’s regulatory authority and exclusive jurisdiction. The proposal would clarify their treatment under federal law as disputes continue over whether prediction-market products should be overseen by federal or state authorities.