Prediction market roundup: CFTC sends proposed event contract rules to White House

Fresh off two stinging circuit court defeats, the federal regulator on derivatives made two proposals to the White House that could alter long-term regulatory treatment of event contracts.

On Monday, the US Commodity Futures Trading Commission submitted the drafts to request review for modifying the definition of a “swap,” for prediction market purposes. A swap is broadly defined as a transaction that depends on the occurrence of an event associated with a “financial, economic, or commercial consequence.”

One proposal (RIN: 3038-AF82), seeks to broaden the definition of a swap to include event contracts. A separate proposal is pending review on whether swaps can exclude gaming-style products.

If approved, the rule would prohibit Designated Contract Markets (DCMs) from listing contracts on online gaming products such as blackjack and craps. The regulator submitted the proposals this week to the White House Office of Information and Regulatory Affairs. The drafts may appease iCasino advocates with trepidation that prediction markets could unseat the products in the coming years.

Last week, the US Court of Appeals for the Sixth Circuit ruled in favour of Tennessee, reversing a lower court decision. In 2025, Kalshi began offering event contracts in the Volunteer State, arguing that the products met the standard for swaps. The timetable for the next stages of the process are immediately unclear.

United front against prediction markets at G2E

For the second consecutive year, a bevy of states rights advocates took a united stand against prediction markets at the Global Gaming Expo. The American Gaming Association, which has led the charge versus the new asset class, estimates that states have lost more than $1 billion in tax revenue from the rise of predictions.

At this week’s show, The AGA joined forces with The Indian Gaming Association, which views prediction markets as an existential threat against the future of the US regulated gaming market. On an opening-day panel Monday, AGA President Bill Miller took exception with claims from predictions operators that the contracts can serve as viable hedging tools.

In Miller’s view, a customary Tuesday night baseball game “does not serve” an economic purpose, but is rather sports wagering. Miller was joined on stage by IGA Chair David Bean and executive director Jason Giles. Amid rapid expansion, prediction markets have gained a strong following in California and Texas, in particularly. Another panelist, California Nations Indian Gaming Association Chair James Siva, remarked that the tribes are the only operator in the state.

While Miller opined that the fight is likely headed to the Supreme Court, he believes the states have gained momentum on the back of recent lower court victories.

“The only way we lose is if we take our foot off their throat,” Miller said.

Cruz college bill passes by wide margin

As the gaming industry converged on Las Vegas for the prominent conference, a groundbreaking bill overwhelmingly passed in the US Senate. On Monday, the Protect College Sports Act, a bill from Sen. Ted Cruz (R – Texas) on uniform standards in college athletics, passed by a margin of 77-22.

The act explicitly gives conferences and athletic associations the ability to restrict a player from participating in college sports if that athlete engages in sports betting or sports event contracts. In May, Cruz underscored that the integrity on both markets should be of the utmost importance. The bill now heads to the US House of Representatives.

Also this week, reports surfaced that Kalshi has sought a new funding round of $1 billion that would value the company at approximately $40 billion. Kalshi’s valuation has more than doubled over the last year.

In other news, San Antonio Spurs center Victor Wembanyama weighed in on player endorsements of prediction market and sportsbook operators. In recent months, both LeBron James and Giannis Antetokounmpo have received major deals to endorse prediction markets.

Asked if he would consider endorsing either type of operator, Wembanyama responded: “Absolutely not, honestly, I think it’s very sad to see some players promote it.”