CFTC files 'swap' definition change rules to White House for review
The Commodity Futures Trading Commission filed two rule changes that would alter the definition of a 'swap' with the White House for review. The submission, noted in a brief Westlaw filing, touches on event contracts traded on prediction market platforms. No details on the substance of the changes or their specific impact were provided. The move follows a separate CFTC event-contract proposal sent to the White House a day earlier.
These dual submissions show the CFTC racing to fortify federal jurisdiction as state courts strip preemption protections from platforms like Kalshi and Polymarket. Ohio and Tennessee have already exposed Kalshi's sports contracts to state gambling laws, and New York is suing Polymarket on the same theory. Defining event contracts as swaps would place them under exclusive CFTC authority and halt that state-by-state bleed.
But rulemaking moves slowly. State attorneys general are filing faster. Kalshi and Polymarket now spend on three fronts: federal rule comments, state court defense, and product redesign to satisfy CFTC warnings. The first platform to lose another major state case becomes the template every attorney general copies. The White House review timeline means no rule can rescue markets already under state assault.