CFTC excludes licensed betting products from 'swap' definition effective 19 October

The Commodity Futures Trading Commission published in the Federal Register on 19 October 2026 an interim final rule that excludes "casino-style gambling products" from the definition of swap, and that exclusion takes effect the same day. The interim text is open for comments until 18 November 2026; the CFTC simultaneously published a proposed rule to include "event contracts" as swaps, and comments on that proposal also close on 18 November.

By Miguel Sandoval, Corresponsal de regulación.

What changes on 19 October and what remains a proposal

The revised wording of the swap definition in 17 CFR 1.3 adds new paragraph (7) that excludes from the definition any agreement offered by a person "licensed or authorized to offer gambling or accept wagers under state law, or under tribal law pursuant to the Indian Gaming Regulatory Act, acting within that license and regulated there as gambling," provided the product "is not traded on a board of trade, an exchange, a swap execution facility, or any other venue in which transactions are executed multilaterally or subject to bilateral negotiation."

The exclusion lists three specific categories: sports betting accepted by a licensed bookmaker; bets on casino table games, slot machines and other electronic gaming devices; and other gaming, "such as bingo, pool betting, lotteries and raffles."

The second action published on 19 October is the proposed rule titled "Further Definition of 'Swap'—Inclusions", which would add a potential inclusion, in new paragraph (2)(i)(G), of so-called event contracts —"including those based on sports-, politics-, cultural-, and weather-related events"— within the swap definition. That proposal is not yet a rule; its text opens a comment period until 18 November 2026 and does not change the law until a final rule is issued.

Texts, dates and formal references

Both documents were dated as issued on 15 October 2026 and made available for public inspection on Friday 16 October. The interim rule appears as FR Doc 2026-21376, RIN 3038-AF81, in 91 FR 65969; the proposed rule appears as FR Doc 2026-21377, RIN 3038-AF82, in 91 FR 66022. The "DATES" section of the interim rule states explicitly that the effective date is 19 October 2026 and that the comment period closes on 18 November 2026.

The CFTC recorded that Chairman Michael Selig voted in favor of both documents and that no commissioner voted against. The agency described the interim regulation as "Interim final rule; request for comments" and warned that it may "modify the Interim Final Rule if warranted."

Practical scope according to the CFTC and open questions

The CFTC says the exclusion "would not change the legal rights or obligations of market participants" and that its internal analysis indicates the Commission already treats casino-style gaming products as outside its jurisdiction and is not aware of any such products traded on exchanges registered with the CFTC. The agency adds that it does not expect new compliance costs for licensed operators.

The interim rule raises several questions for the comment period: whether the exclusion should cover providers other than companies regulated by States or tribes; whether it is clear which products are "regulated as gambling or wagering"; and whether there is a better way to separate swaps from gambling than the proposed test based on how a product is traded.

The inclusion proposal requests comments "on any aspect" of the event-contracts definition and lists state actions it intends to address in its consultation questions, including orders requiring Kalshi to geofence sporting contracts in Michigan, Washington and Nevada; the criminal case in Arizona; and the New York litigation. The text also mentions a petition for rehearing en banc against the Ninth Circuit decision.

Relationship with litigation and the judicial calendar

The two comment deadlines, which end on 18 November 2026, overlap with upcoming U.S. Supreme Court deadlines in appeals related to event-contract platforms. Kalshi has until 9 November 2026 to respond to New Jersey’s petition, Flaherty v. KalshiEX, No. 26-299, while both comment periods remain open. Nevada has responses scheduled for Robinhood (No. 26-338) and Crypto.com (No. 26-344) on 13 and 16 November 2026, respectively.

That overlap allows parties in the appeals to cite in their filings both a rule in effect (the 19 October exclusion) and a pending proposal seeking to define event contracts as swaps.

"The exclusion would not change the legal rights or obligations of market participants," the CFTC writes in the interim rule text.

The CFTC also indicates it may "modify the Interim Final Rule if warranted" during the comment process.

Legality of the procedure and the "good cause" basis

The CFTC justified waiving the ordinary notice-and-comment procedure by asserting "good cause," citing the risk of serious or imminent market harm and referencing prior occasions when interim rules filled a gap left by a court order. The argument ties to the circuit split the Supreme Court is set to resolve, but the agency has offered an open comment period through 18 November to mitigate procedural risk.

Documents cited and access to comments

Interested parties can submit comments at Regulations.gov citing the applicable RIN or by mail to the Commission’s Secretary. The texts of the rule and the proposal are identified as 91 FR 65969 (interim rule) and 91 FR 66022 (proposed rule) and were published in the Federal Register with effective dates and comment deadlines reproduced above.

The distinction the CFTC has now codified separates, for state or tribal licensed operators, bets and gambling explicitly from contracts the agency treats as swaps; the final definition of event contracts, by contrast, remains under public consultation and is not yet regulatory.