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State of Play’s TL;DR
- The Commodity Futures Trading Commission issued an interim final rule excluding qualifying casino-style gambling products from the swap definition.
- Utah filed criminal charges against KalshiEX LLC and its co-founders on Oct. 28.
- The US and CFTC sued Utah to block state enforcement on federal pre-emption grounds.
The Commodity Futures Trading Commission (CFTC) has issued an interim final rule excluding qualifying casino-style gambling products from the definition of a swap, according to JD Supra’s publication of Moore & Van Allen’s November legal newsletter.
The agency also proposed bringing event contracts tied to sports, politics, culture, and weather within that definition. Those regulatory developments arrive alongside a federal-state court fight over prediction markets and Utah’s criminal case against Kalshi.
CFTC separates casino-style products from event contracts
The newsletter reports two distinct CFTC actions: an interim final rule addressing qualifying casino-style gambling products, and a proposal covering several categories of event contracts.
The distinction matters to the regulatory status of the products: the casino-style exclusion was issued as an interim final rule, while the inclusion of sports, political, cultural, and weather event contracts remains a proposal.
The comment deadline for the gambling-related actions is Nov. 18.
Utah charges Kalshi as federal authorities challenge enforcement
Utah filed criminal charges against KalshiEX LLC and co-founders Tarek Mansour and Luana Lopes Lara on Oct. 28. The charges allege 12 sports transactions were placed in Utah, according to the newsletter.
Kalshi denies wrongdoing, calling the charges “a crazy overreach.”
A day earlier, the US and CFTC sued Utah, seeking to block state enforcement and related investigations on federal pre-emption grounds — the argument that federal law displaces state authority in the disputed area.
The newsletter also describes related litigation in Illinois. On Oct. 2, Judge Martha Pacold of the Northern District of Illinois granted preliminary-injunction requests in part in prediction market cases involving Kalshi, Coinbase, and the CFTC.
Based on reporting by JD Supra.
