White House Reviews CFTC Prediction-Market Rules Amid Jurisdiction Clash With States

The White House is reviewing two rule proposals submitted by the Commodity Futures Trading Commission as a fight over federal authority in prediction markets intensifies.

Crypto-focused media outlet The Block reported on October 30 that the CFTC sent the two proposals this week to the Office of Information and Regulatory Affairs, a White House office that reviews federal rules before they are formally released. One proposal would classify event contracts as swaps. The other would exclude casino-style gambling products from the CFTC’s jurisdiction.

Major prediction-market platforms including Polymarket and Kalshi have grown into businesses worth tens of billions of dollars. They offer betting on events ranging from whether a company will go public to the outcome of sports contests. The CFTC maintains that most prediction-market contracts, including sports-related contracts, qualify as swaps and therefore fall under federal jurisdiction. Several states, however, have sued, arguing the platforms violate state gambling laws. The CFTC has also filed counterclaims aimed at blocking those state regulatory efforts.

Last week, a federal appeals court rejected Kalshi’s appeal and ruled that Ohio and Tennessee can enforce their own sports-betting laws against the company. The dispute could ultimately reach the Supreme Court. Earlier in October, New Jersey Attorney General Jennifer Davenport asked the high court to hear the matter.

The proposal covering casino-style gambling products is currently at the interim final rule stage, meaning it could take effect as soon as it is published. Gaming and sports-betting lawyer Daniel Wallach wrote on X that if the interim rule goes beyond excluding casino-style products and implicitly allows sports event contracts, it could prompt an immediate lawsuit in federal court under the Administrative Procedure Act.

The prediction-market proposals were submitted shortly after the CFTC sent crypto-related rule proposals to the White House last week. Regulators have been moving more quickly on standalone federal rulemaking after the Clarity Act, which would have created a broad federal framework for the digital-asset industry, failed in a Senate procedural vote earlier in October.