CFTC rule takes state-licensed sportsbook and casino wagers out of ‘swap’ on publication, and proposes to write event contracts, sports included, into it

On 9 October 2026 the CFTC issued two texts amending the definition of 'swap' in 17 CFR 1.3, the SEC joining each to satisfy section 712(d)(1) of the Dodd-Frank Act. The first, an interim final rule (RIN 3038-AF81), adds paragraph (7), 'Casino-style gambling products': an agreement is not a swap if it is offered by a State- or tribally-licensed operator acting within its licence, is regulated as gambling under that law, and is not traded on an exchange, a swap execution facility 'or any other market in which trades are executed multilaterally or subject to individual negotiation'. It names sports wagers, casino games and other licensed games of chance, and a footnote calls the exclusion 'non-exclusive'. The Commission found good cause to adopt it without prior notice and comment and to make it effective on publication. The second, a proposed rule (RIN 3038-AF82), would add 'Event contracts, including those based on sports-, politics-, cultural, and weather-related events'. Both are pre-publication copies, not yet in the Federal Register as of 16 October; each 30-day comment period runs from publication.

What separates an excluded bet from a proposed swap is not the event but who offers it and how it trades: a wager accepted by a licensed sportsbook as principal falls outside; the same sports outcome traded multilaterally on a designated contract market would fall inside. A licensee running a multilateral market fails the exclusion, but the rule says failure implies nothing about swap status; such products are left to a facts-and-circumstances analysis. Neither text declares state law preempted; the interim rule says the Commission does not presume Congress meant to disturb the federal-state balance.

The interim rule recites the Sixth Circuit's concern (Signal 025) that a broad 'swap' would reach every sports wager placed off a contract market, and the Ninth Circuit's in Assad (Signal 019). The proposal says that reasoning rested substantially on the worry that treating sports event contracts as swaps would pull casino gambling under CFTC jurisdiction, and that Rule 40.11, the rule behind Signal 008, 'does not provide a basis' to conclude event contracts are not swaps. Gambling.com reports that Kalshi has since cited the proposal in a Sixth Circuit rehearing petition; the court has not acted on it. For licensed sportsbooks and casinos, the exclusion takes effect on publication; for contract markets, the inclusion is a proposal. No court has ruled on either text.