Published on: June 11, 2026, 02:20h.
Updated on: June 11, 2026, 02:20h.
- The CFTC claims a federal bill from 2010 grants it authority over sports event contracts
- The agency contends that the Dodd-Frank Act did not prohibit sports as swaps
The Commodity Futures Trading Commission (CFTC) has proposed a revision to Rule 40.11, aimed at “modernizing” a federal regulation that currently restricts prediction markets from trading on contracts related to war, terrorism, assassination, and gaming.
The CFTC has introduced a comprehensive 267-page revision of Rule 40.11, known as the “Special Rule,” intended to modernize its regulations and fortify its authority over innovative prediction market products. These alterations aim to clarify the criteria for identifying when an event contract pertains to a specified activity.
In detail, the draft defines “war” as encompassing all forms of military action, not restricted to officially declared conflicts. “Terrorism” covers both physical and digital attacks, while “assassination” refers to any deliberate killing.
Prediction markets will remain prohibited from trading on events encompassing any of these elements.
CFTC Advocates for Gaming Clarifications
Crucially, the CFTC has proposed significant reforms in defining types of “gaming-related contracts.”
The agency wants to eliminate certain sports event contracts that are deemed to pose significant public policy concerns, such as player-injury incidents, officiating issues, and pre-college athletics. Additionally, it suggests excluding “games of chance typical of casinos” from prediction markets, meaning outcomes of roulette spins would not be available for trading.
Despite this, the CFTC remains committed to allowing sports event trading within prediction markets. During the Trump administration, measures were introduced to bolster the CFTC’s oversight regarding sports events.
In its propositions, the CFTC asserts that the interpretations of the 2010 Dodd-Frank Act revised the Commodity Exchange Act to categorize sports event contracts as swaps.
The proposal details that Congress recognized in 2010 that “events such as the Super Bowl, the Kentucky Derby, and the Masters golf tournament could potentially fall under the CEA.” The CFTC believes that the Special Rule “did not prohibit event contracts relating to these types of events.”
The Special Rule confirms the CFTC’s jurisdiction over event contracts and outlines a process through which the CFTC “may” deem such contracts contrary to public interest. Importantly, the law does not grant the Commission the authority to impose an absolute ban on these contracts without a public interest evaluation,” the petition elaborates.
According to the CFTC, the Dodd-Frank Act equips the agency with the legal ability to permit trading on sports events possessing “commercial utility” or “informational value.”
Supreme Court Implications
The CFTC’s stance regarding sports events is likely to face opposition from state attorneys general, regulatory gaming commissions, and legislators.
Numerous states that have enacted regulations for sports gambling argue the CFTC is exceeding its jurisdiction and allowing companies to operate sports betting within their borders without appropriate licensing or oversight. States opposed to sports betting charge that the CFTC is imposing such gaming on their residents.
In 2018, a pivotal ruling by the Supreme Court determined that the Professional and Amateur Sports Protection Act (PASPA) contravened the anti-commandeering principles of the US Constitution, which coerced 49 states into abstaining from single-game sports betting while allowing Nevada to participate.
“Congress can regulate sports gambling directly, but when it chooses not to do so, each state is at liberty to act independently,” the SCOTUS majority stated in May 2018.
“Our duty is to interpret the legislation established by Congress and to judge its alignment with the Constitution. PASPA does not align. PASPA regulates the governance of state regulations over their citizens. The Constitution grants Congress no such authority,” the ruling concluded.