The Commodity Futures Trading Commission has filed new regulations with the White House to tighten its grip on forecasting markets.

The Commodity Futures Trading Commission sent two bills to the White House Office of Information and Regulatory Oversight on September 28th, defining the term "swap" in relation to event contracts that are yes-or-no bets on platforms such as Kalshi and Polymarket. This bill attempts to restrain federal agencies from overseeing prediction markets.

Rule 2 divides the role of swap and casino.

Proposed rule No. 3038-AF82 would stipulate that event contracts fall within the clear definition of a swap and go through a public comment process, while final federal regulation No. [2]-AF81 would exclude casino gambling products from the sweep definition and could take effect upon approval by the Commodity Futures Trading Commission to regulate both acts as having no economic significance, and the full text has not been released to the public.

The definition of a sweep is a bet on jurisdiction.

The term "swap" was at the center of a jurisdictional battle. If event contracts were to be classified as swaps, they would fall under the Commodity Futures Trading Commission, whose chairman Michael Selick saw it as an exclusive power that freed platforms from state gambling regulatory agencies.[citation needed] Several states have filed lawsuits against predictive marketing service providers alleging illegal betting while commodity futures trading committees appealed in return for interference with state regulation. This repeal occurred after multiple appellate court rulings challenging the merits of the contract and such disagreements being within the eyes of the courts.[24]

Expanded form after the Clarity Act.

This submission extends the format in which the Commodity Futures Trading Commission proceeds to rule on its own instead of waiting for Congress to act, consistent with a post-Clarity Act change that regulatory agencies are stepping into to lead digital asset policymaking amid rising marketplace credibility questions. The agency previously sent another draft crypto regulation to the White House while officials warned that contracts tied to public discussions open up easy loopholes.

Pressure is mounting on the forecasting markets, both federal and state.

Regulatory scrutiny has increased at both the federal and state levels. The Commodity Futures Trading Commission is investigating former Senator Adam Kinzinger over a bet on Kalshi tied to his own pardon. Earlier this week, the commission also sent out a warning to markets called "talking" suggesting that contracts resulting from questions about whether named individuals will say certain words should be considered vulnerable to hacking.

Point is, the rules aren't final.

At this stage, the Commodity Futures Trading Commission's rule is still a manifestation of intent; it is not a complete law but an attempt to define swaps by federal agencies in their own right. It was an attempt at regulating what courts and states fought over as cases for readers. The key point being that deciding whether to classify events as swap or betting products would determine who regulated prediction markets and affect state prosecutions of alleged illegal gambling.