The Commodity Futures Trading Commission has submitted two event contract rules to the White House Office of Management and Budget for review, the agency's clearest attempt yet to establish prediction markets as federal rather than state regulatory territory.

The submission, dated September 30, 2026, arrives while several states litigate against the CFTC over whether sports-linked contracts constitute gambling under state law.

Two rules, one jurisdictional claim

The first measure is a proposed rule that would amend the regulatory definition of a "swap" to explicitly cover event contracts — the binary yes-or-no products on which prediction markets operate. The swap label carries significant weight: swaps fall under the Commodity Exchange Act, the federal statute the CFTC administers. Writing event contracts directly into that definition would anchor the products more firmly within the agency's rulebook.

The second measure cuts in the opposite direction. An interim final rule would exclude "casino-style gambling products" from swap classification entirely. The choice of instrument matters here. Agencies typically deploy interim final rules when they want a provision to take effect while public comments are still being gathered, rather than waiting out the full notice-and-comment cycle.

Both rules reinforce the position the CFTC has maintained throughout the dispute: that it holds exclusive jurisdiction over event contracts under the Commodity Exchange Act.

State pushback escalates

Several states reject that exclusivity claim. Ohio and Tennessee have argued that sports event contracts violate their state gambling laws and have taken the fight into litigation against the agency.

New Jersey has escalated further. The state's attorney general has petitioned the Supreme Court to review the jurisdictional question, a move that could ultimately place the highest court — not the CFTC — in the position of final arbiter.

The September 30 submission builds on earlier commission action this year. In June, the CFTC issued a notice of proposed rulemaking seeking public comment on how to assess event contracts tied to specified activities, including gaming. On September 22, the agency's Division of Market Oversight published an advisory flagging elevated manipulation risks in "mention markets" — contracts that settle based on whether a particular person says a particular thing — with implications for listing requirements.

A crowded market awaits the answer

The rules land in a market that has grown crowded. Kalshi and Polymarket both operate as CFTC-registered designated contract markets for event contracts, placing them under federal exchange supervision rather than in an offshore gray zone. Crypto.com and Robinhood offer similar products, widening the set of venues where traders can take positions on real-world outcomes.

For operators, the swap-definition change would formalize what is already operational reality: federal registration and CFTC oversight. The casino-style carve-out, however, creates a new compliance question — where exactly does an event contract end and a casino-style product begin? Sports contracts sit uncomfortably close to that line, and the states suing the CFTC are likely to probe it hard in litigation.

What the rules can and cannot settle

The stakes for the states rise if OMB clears the rules. Ohio, Tennessee and others would then argue not merely against the agency's interpretation of the Commodity Exchange Act but against its formal regulations — a materially harder legal position.

The rules still face procedural hurdles. Both require passage through White House review, and the proposed rule would go through its own process before becoming final.

New Jersey's cert petition means the Supreme Court could eventually resolve the jurisdictional question outright, and a ruling there could reshape the market's structure regardless of what the CFTC writes into its regulations. The OMB review window and the Supreme Court's decision on whether to hear New Jersey's case now form the two timelines the industry and state regulators alike will be watching.