CFTC keeps casino bets out of the swap definition and proposes folding event contracts in

The Commodity Futures Trading Commission on Friday published an interim final rule that excludes casino-style gambling products — including sportsbook and casino-game wagers — from the federal "swap" definition, and a separate proposal that would expressly fold event contracts on sports, politics, culture, and weather into that same definition.

Together, the two actions draw a sharper line between state-regulated casino and sportsbook betting and exchange-traded event contracts the agency says are swaps under the Commodity Exchange Act. Both packages identify the SEC as joining under Dodd-Frank Section 712(d)(1), which requires the CFTC and SEC to jointly further define "swap."

Casino and sportsbook wagers left outside the swap net

In press release 9309-26, the CFTC said the Interim Final Rule (RIN 3038-AF81) codifies the agency's longstanding position that casino-style gambling products, including wagers placed on sportsbooks and casino games, are excluded from the swap definition. The accompanying interim final rule text is titled Further Definition of "Swap" to Exclude Casino-Style Gambling Products and adopts that exclusion as an interim final rule with a request for comments.

"Casino-style gambling products are not derivatives," Chairman Michael S. Selig said in the release. He said the Commission is clarifying the limits of its regulatory remit by excluding casino-style gambling products from the swap definition, as it has done for other products regulated by the states. The agency said the IFR is effective immediately upon publication in the Federal Register, with written comments due via Regulations.gov within 30 days of that publication.

Event contracts proposed as swaps under CFTC remit

In press release 9310-26, the CFTC published a Notice of Proposed Rulemaking (RIN 3038-AF82) that would expressly further define the term swap to include event contracts, including those based on sports, politics, cultural, and weather-related events. The proposal says those contracts are financial instruments commonly known to the trade as swaps and aims to resolve ambiguity about their status. The NPRM text is titled Further Definition of "Swap" – Inclusions.

"Americans use event contracts to hedge risks, speculate, and provide the public with information about the outcome of future events," Selig said. "These products are commodity derivatives squarely within the CFTC's regulatory remit under the Commodity Exchange Act and are within the agency's exclusive jurisdiction." Comments on the NPRM are also due within 30 days of Federal Register publication via Regulations.gov.

What this does not settle

Neither release finalizes how courts will treat every sports-linked event contract already trading, and the NPRM is still a proposal. Readers still need the Federal Register texts as published, the comment files, and any later joint CFTC-SEC revisions before treating the event-contract inclusion as locked. Until then, Friday's primary record is the split the agency itself drew: casino-style sportsbook and table wagers outside the swap definition on an interim-final basis, and event contracts proposed for express inclusion as swaps under CFTC jurisdiction.