The CFTC sent two prediction market rules to the White House. Here is what each one can actually do.
What was filed, and where it sits
The Office of Information and Regulatory Affairs, the arm of the White House budget office that reviews federal rules before they are published, listed two Commodity Futures Trading Commission entries on its docket on 28 September 2026. The listing became public and widely reported on 1 October. Both are flagged as not economically significant, which puts them on the lighter review track.
| Entry | RIN | Stage | What it does | Comment period |
|---|---|---|---|---|
| Further Definition of "Swap" to Include Event Contracts | 3038-AF82 | Proposed rule | Brings event contracts inside the statutory swap definition, and so inside exclusive CFTC jurisdiction | Yes, after publication |
| Further Definition of "Swap" to Exclude Casino-Style Gambling Products | 3038-AF81 | Interim final rule | Carves casino-style gambling products out of the swap definition | Can take effect on publication, comments taken afterwards |
The titles are all that is public. The rule texts have not been released and will not be until OIRA clears them and the Federal Register prints them. Everything below is therefore about procedure and about what a definition can and cannot accomplish, not about the drafting.
The filing follows the advance notice of proposed rulemaking the CFTC published on 16 March 2026 under RIN 3038-AF65, which closed to comments on 30 April. That notice carried the one number worth keeping in mind: designated contract markets certified roughly 1,600 event contracts in 2025, against an average of about five a year between 2006 and 2020.
Why "swap" is the whole fight
Under the Commodity Exchange Act the CFTC has exclusive jurisdiction over swaps traded on a registered exchange. Kalshi's argument in every state case has been the same three steps: our contracts are swaps, swaps are federal, therefore state gambling law cannot reach them. States have attacked the first step and the third.
A definitional rule is aimed squarely at step one. If the Commission says in a regulation that an event contract is a swap, the agency's own position becomes formal rather than a litigating stance. What it does not do is bind a federal court. Since the Supreme Court ended Chevron deference in 2024, courts read statutes themselves and treat an agency's interpretation as persuasive at most. A rule that restates the CFTC's reading of the word "swap" will be read by the same judges who have already read the word without it.
The courts have already answered, three different ways
| Court | Date | Case | Result for Kalshi | What it said about "swap" |
|---|---|---|---|---|
| Third Circuit | 6 April 2026 | New Jersey | Won, 2-1 | Accepted the preemption argument |
| Ninth Circuit | 28 August 2026 | Nevada | Lost | Substance is sports gambling "regardless of whether Kalshi calls them swaps" |
| Sixth Circuit | 25 September 2026 | Ohio and Tennessee | Lost, unanimous | Not shown to be swaps; and even if they were, the CEA does not preempt state gambling law |
| Fourth Circuit | Pending | Maryland | Argued, awaiting decision | Not yet |
The Sixth Circuit opinion, written by Judge Julia Smith Gibbons three days before the OIRA filing, is the one that limits what the new rules can achieve. The panel held that Kalshi "has not shown that its sports-event contracts satisfy the statutory definition of a 'swap'". Then it went further: "even assuming that Kalshi's sports-event contracts are swaps, we alternatively hold that the CEA neither expressly nor impliedly preempts Ohio's or Tennessee's gambling laws." A rule that wins the first point loses nothing on the second, because the second does not depend on it.
That alternative holding is the reason the inclusion rule is less powerful than its title suggests. It can shore up the CFTC's reading of the statute. It cannot, on its own, overturn a circuit that has said the statute does not displace state law either way. Only the Supreme Court or Congress can do that, and New Jersey's attorney general filed a petition for certiorari on 2 September asking the Court to take exactly this question. We covered the timeline and the market's pricing of it in our 5 September piece, and the hour-by-hour repricing after the Ninth Circuit in this one.
The interim final rule is the odd one
An interim final rule skips the normal notice-and-comment step by invoking the Administrative Procedure Act's good-cause exception. It takes effect on publication and the agency collects comments afterwards. The exception exists for emergencies and for rules so uncontroversial that comment would be pointless. Using it on anything contested invites a procedural challenge before anyone argues the merits.
What makes this filing unusual is which rule got the fast track. The interim final rule is the exclusion, the one that takes casino-style products out of the definition. Read narrowly, that is a concession to the states: slots and roulette dressed as event contracts are not swaps. The rule that would actually help Kalshi and Polymarket, the inclusion, is the one going the slow way through comment.
Gaming lawyer Daniel Wallach told Covers the question is what the exclusion rule says beyond its title. If it "provides tacit authorization for sports event contracts", he said, "it could prompt immediate APA litigation in federal court." In other words, if the exclusion is drafted so that everything it does not exclude is implicitly a swap, the interim final rule becomes the inclusion rule in disguise, and the good-cause shortcut becomes the first thing litigated. The American Economic Liberties Project made the same procedural objection in a 1 October statement, alongside its own claim that ordinary users have lost around 500 million dollars on Kalshi since launch, a figure we have not been able to verify independently.
How long each path takes
OIRA review under Executive Order 12866 is nominally capped at 90 days and routinely extended. For rules flagged not economically significant it is often shorter. After clearance, the proposed rule is published, a comment period of typically 30 to 60 days runs, the Commission reads the comments, votes on a final rule, and publishes that with its own effective date. Even on an aggressive schedule that is a 2027 final rule, and the final rule is then itself challengeable in court.
The interim final rule is faster: it is effective when the Federal Register prints it. But it is also the one most exposed to a procedural challenge, and a court that stays it puts the agency back at the start.
Against that, the cert petition is already on file and Kalshi's response was due in early October, extendable. If the Court grants review this term, argument and a decision could land before the inclusion rule is final. If it denies, the circuit split stands and the rule becomes the CFTC's main instrument, with the Sixth Circuit's preemption holding still sitting in the way across Kentucky, Michigan, Ohio and Tennessee. Our injunction scoreboard and 50-state tracker are the running record of where each state stands while that plays out.
What to watch for in the text
Whether "event contract" is defined by reference to sports. The ANPRM in March asked whether the public interest standard for "gaming" contracts should treat sports differently. If the inclusion rule folds sports contracts into the swap definition without a carve-out, it is a direct answer to the Ninth and Sixth Circuits and will be litigated as one.
What "casino-style" means. A list of excluded products is a list of things the CFTC concedes are gambling. Every state attorney general will read it as a floor, not a ceiling.
Whether the preamble addresses preemption at all. A definition rule that is silent on preemption leaves the Sixth Circuit's alternative holding untouched. One that asserts preemption is asking courts to defer on a question they have said is theirs.
Method and limits
This page is built from the OIRA docket listing as reported on 1 October 2026 by Decrypt, Covers and CasinoBeats, from the CFTC's March 2026 advance notice in the Federal Register, and from the published opinions of the Third, Sixth and Ninth Circuits. We have not seen the text of either rule, because neither has been published. The characterisation of what each rule does comes from its title and from the stage recorded on the docket, which is all that is public.
Limits. OIRA timelines are norms, not guarantees, and the review clock can be paused or extended. We describe the circuit holdings at the level of their stated rules and have not attempted to summarise every argument in the opinions. Nothing here is legal advice, and nothing here is a prediction of how any court or the Commission will decide.
Frequently asked questions
Did the CFTC just make prediction markets legal in every state?
No. It filed two rules for White House review. Neither is published, neither is in force, and a federal appeals court has already held that even if the contracts are swaps, federal law does not override state gambling law.
What is the difference between a proposed rule and an interim final rule?
A proposed rule is published for public comment and only becomes binding when a final rule is later adopted. An interim final rule takes effect on publication by invoking the good-cause exception to notice and comment, with comments collected afterwards.
Why does it matter whether an event contract is a swap?
Because the CFTC has exclusive jurisdiction over swaps traded on registered exchanges. If a contract is a swap, Kalshi argues state gambling law cannot reach it. The Sixth Circuit held that the argument fails at both steps.
Can a CFTC rule overrule the Sixth and Ninth Circuits?
Not directly. Courts interpret statutes themselves and treat agency readings as persuasive at most. A rule can strengthen the Commission's position in future cases; it cannot vacate a decided one.
When will the Supreme Court decide whether to take the case?
New Jersey petitioned on 2 September 2026. The Court usually decides whether to grant a petition within a few months of the response being filed, which was due in early October and can be extended.
Sources
- Decrypt, CFTC sends White House new rules to cement its grip on prediction markets, 1 October 2026.
- Covers, CFTC proposes prediction market rule changes to White House, 1 October 2026, and Sixth Circuit rules in favor of Ohio, Tennessee, 25 September 2026.
- CasinoBeats, CFTC filings test the line between prediction markets and gambling, 1 October 2026.
- CFTC, Prediction Markets, advance notice of proposed rulemaking, Federal Register, 16 March 2026.
- American Economic Liberties Project, statement on the CFTC filings, 1 October 2026.
- The Block, Kalshi loses appeal over Ohio and Tennessee sports betting laws, 26 September 2026.
18+ only. This page reports public regulatory filings and court decisions. It is not legal, financial or betting advice, and it is not a recommendation to trade any contract or place any wager. If gambling stops being fun, help is available at 1-800-GAMBLER.