Daniel Wallach says courts ruled sports event contracts are not swaps
Daniel Wallach posted on X that a court held sports event contracts are not swaps under the Commodity Exchange Act. He noted a rule revision does not override a court's statutory interpretation post-Loper Bright, referencing the Supreme Court decision that limited deference to agency rulemaking. The post adds to the ongoing legal debate over how prediction market contracts are classified under federal law. Wallach made similar posts about repeated court rulings on this question. Both posts came in late September and early October.
Wallach's framing arms CFTC-regulated platforms with a counter-argument against state gambling classification. If courts have already held these contracts are not swaps, states cannot easily reclassify them as gambling instruments merely because they involve sports outcomes. Kalshi, Polymarket, and Robinhood all face state preemption fights where the swap-versus-gambling line determines survival. The Loper Bright angle matters because it weakens any new CFTC rule that tries to declare otherwise; agency say-so no longer wins against prior judicial interpretation.
Operators in active litigation can cite this precedent to resist state AG playbook copying. The stakes fall hardest on platforms without deep legal benches, since each state fight now demands both statutory history and administrative law expertise. A federal court accepting Wallach's read would narrow the path for state gambling claims, but only if operators can get that question before the right judge.