A federal appeals court ruled that sports betting contracts on CFTC-regulated prediction markets like Kalshi qualify as 'swaps' under federal law, preempting state gambling regulations. The decision prevents New Jersey from enforcing its sports betting laws against these platforms, affirming CFTC's exclusive jurisdiction. This creates a significant exemption for prediction markets from state-level gambling restrictions.
Background
Prediction markets allow users to trade contracts based on event outcomes, blurring lines between financial instruments and gambling. The CFTC regulates certain platforms as designated contract markets under the Commodity Exchange Act.
- Source
- Ars Technica
- Published
- Apr 7, 2026 at 05:56 AM
- Score
- 6.0 / 10