The U.S. Commodity Futures Trading Commission on Friday issued an interim final rule and proposed a companion measure to classify event contracts on platforms like Kalshi and Polymarket as swaps. The dual action targets prediction markets under federal derivatives law, according to agency filings.

Chairman Mike Selig, the CFTC's sole sitting commissioner, framed the move as a step toward cementing exclusive federal authority over prediction markets. The interim final rule takes effect immediately, though it remains open to public input during implementation. The proposed rule would fold "event contracts, including those based on sports, politics, cultural, and weather-related events" into the existing U.S. swaps framework and carries a 30-day comment window. The White House completed its review of the package less than two weeks ago, an unusually fast turnaround.

What does the rule actually do?

The interim final rule excludes casino-style wagering from the CFTC's definition of a swap, reaffirming that state and tribal sportsbooks sit outside federal derivatives oversight. The companion proposal takes the opposite tack for prediction markets: it asserts that event contracts meet the statutory definition of a swap and therefore belong under the CFTC.

Why is the agency pushing now?

The CFTC faces lawsuits from several states that claim authority over sports-related contracts on Kalshi and Polymarket. Federal appellate courts have split: one ruling backed the CFTC, two sided with the states. Multiple parties have asked the U.S. Supreme Court to intervene, and objecting states filed views at the Court this week.

A formal rulemaking record gives the agency something concrete to cite if the justices take the case. The interim final rule in particular signals that the agency has begun translating Selig's interpretation into binding policy rather than relying on enforcement guidance.

Jaret Seiberg, a policy analyst at TD Cowen, wrote in a Friday client note: "We view this interim final rule as designed to improve the agency's position in court as the states are arguing that the CFTC's definition of a swap would make federally illegal any wager made at a state or tribal casino or sportsbook." Seiberg added: "Whether this actually works is a different question."

What is the staffing picture?

Selig operates as the lone commissioner on a body designed to hold five members. President Donald Trump has not nominated additional commissioners, leaving the CFTC without a quorum. The Securities and Exchange Commission faces a parallel constraint, with two of five seats filled. The administration's personnel strategy has emphasized removing or limiting Democratic representation at financial regulators, a pattern that lets the White House move policy without multi-member dissent.

What changes for Kalshi and Polymarket?

A successful CFTC classification would install a single federal supervisor and push back the patchwork of state gambling enforcement actions targeting the platforms. A ruling for the states would force Kalshi and others to navigate dozens of separate licensing regimes. Kalshi has aligned with the CFTC's position in court filings, arguing that state gambling statutes cannot reach contracts traded on a federally regulated exchange.

The proposed rule's 30-day comment window runs concurrently with the interim rule's implementation, after which the agency will weigh finalization. The full record will be ready for the CFTC to present to the Supreme Court if the justices grant review of the states' challenge.