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CFTC excludes sportsbook wagers from the swap definition
The Government Publishing Office posted Federal Register Volume 91, Number 200 on Monday, October 19, 2026, including document 2026-21376. That interim final rule, RIN 3038-AF81, is how the Commodity Futures Trading Commission (CFTC) excludes a licensed sportsbook wager from the swap definition, and it takes effect the same day.
What paragraph (7) removes from the swap definition
Paragraph (7) applies only if two tests are both met. The provider must be licensed or otherwise authorised to offer gambling or accept wagers under state law, or under the law of a federally recognised Indian tribe pursuant to IGRA, the 1988 federal tribal-gaming statute, and must act inside that authority. The contract must be regulated as gaming or gambling. It must not trade on a board of trade, an organised exchange, a swap execution facility (SEF), or any other multilateral or individually negotiated market.
Named products include a sportsbook wager on one or more events, a casino table or slot, and bingo, pool wagering, lotteries and raffles.
Missing either test does not itself create a swap. The Securities and Exchange Commission (SEC) joins only under Dodd-Frank section 712(d)(1). The rule does not define a security-based swap.
A house price is not an order book
The house sets one price, and the wager is not cleared. The Commission says that product is not known to the trade as a swap. A designated contract market (DCM) event contract runs the other way: a central book, a trading fee, and a clearing house between the two sides.
"Casino-style gambling products are not derivatives," said Michael S. Selig, chairman of the Commodity Futures Trading Commission. (CFTC, October 9, 2026)
Nothing in paragraph (7) makes a licensed sportsbook ticket a CFTC swap, or takes a DCM sports contract out of the definition. A raffle is excluded. A cleared contract is not.
The rulings that feared a sportsbook would become a swap
On September 25, 2026, in KalshiEX LLC v. Schuler, the Sixth Circuit treated sports event contracts as indistinguishable from casino-style sports wagers. If they are swaps, it wrote, "every sports wager placed in a casino, on an online sports book, or between two friends at a bar" would have to "take place on federal markets." The Register calls that reading atextual, and the citation is marked as modified.
In KalshiEX, LLC v. Assad, the Ninth Circuit on August 28, 2026 concluded the contracts were likely not swaps. The Third Circuit disagreed in KalshiEX, LLC v. Flaherty, 172 F.4th 220 (3d Cir. 2026). The interim rule says it takes the path that opinion described.
Dave Yost's April 30, 2026 letter for 40 states and the District of Columbia called the contracts "indistinguishable from traditional sports betting." On October 7, 2026, 39 states and the District called the courts "hopelessly confused and divided over an issue of immense importance."
Event contracts are the product this rule does not exclude
Release 9310-26, dated October 9, 2026, would place event contracts in the swap definition, including sports, politics, cultural events and weather. The Commission points to 91 FR 66022. The interim rule records a preliminary view that they are known to the trade as swaps under Commodity Exchange Act (CEA) section 1a(47)(A)(iv). Complete iGaming reported both releases on October 12, 2026.
Pew Research Center on May 27, 2026 put monthly global volume on Kalshi and Polymarket at about $24 billion in April 2026, against around $14 billion a month at legal US sportsbooks in 2025. Not the same count.
Arizona's 20-count criminal information against a DCM sits alongside the state revolt over sports event contracts and the NFL's argument to the Supreme Court that sports contracts are gambling.
What the November 18 comment file can still change
Comments run to November 18, 2026, by mail to Christopher Kirkpatrick, secretary of the Commission, at Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581. The Commission cites the circuit split and the state cases as good cause for the immediate effective date, and it may still amend the text.
- August 13, 2012: the CFTC and the SEC further define "swap" at 77 FR 48208, excluding insurance.
- October 9, 2026: releases 9309-26 and 9310-26.
- October 15, 2026: issued in Washington. Filed at 8:45 a.m. on October 16.
- October 19, 2026: published and effective. Comments due November 18, 2026.
Commenters face three questions. Should the provider test cover a private bet? Is "regulated as gaming or gambling" clear? Is multilateral trading the right line?
What the rule leaves open is whether an appeals court will accept that line. A licensed book that later matches orders on a central screen falls outside paragraph (7), and the text refuses to treat that failure as proof the product is a swap.
This article is informational analysis only and is not betting advice.
18+Gambling carries financial risk and can be addictive. If you or someone you know needs help, visit GamCare (UK), call 1-800-GAMBLER (US), or see our Responsible Gambling page. 18+ / 21+ depending on jurisdiction.
Nine-year crypto and forex veteran covering token analysis, prediction markets, and blockchain-based gambling infrastructure. Founder, writer, and consultant specialising in the intersection of digital assets and iGaming.
