White House Reviews CFTC Rules in Sports Betting Dispute

The White House is reviewing two proposals from the Commodity Futures Trading Commission that would change federal oversight of prediction markets. One would expand the definition of swaps to include event contracts. The other would exclude casino-style gambling products from the federal framework.

The first proposal would place more event contracts under CFTC oversight. The second has reached the interim final rule stage, meaning it could face legal challenges if it applies to sports contracts.

Platforms including Polymarket and Kalshi offer contracts tied to politics, entertainment, corporate events and sports. Sports contracts have caused the largest regulatory dispute. The CFTC considers many of them swaps covered by federal law, while states say the platforms must follow local gambling rules.

States have challenged prediction market operators over licensing, taxes and age restrictions. The CFTC has filed legal actions seeking to limit state involvement in markets it considers subject to federal authority.

Last week, a federal appeals court allowed Ohio and Tennessee to enforce their sports gambling laws against Kalshi. The ruling adds to an ongoing dispute over whether federal derivatives law or state gambling rules should govern sports event contracts. The issue could reach the Supreme Court.

The CFTC has also sent cryptocurrency rulemaking proposals to the White House. Those proposals create a separate regulatory issue for the agency.