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ARTICLE · 21 MAY 2024

Divided CFTC Releases "Gaming" Event Contract Rule Proposal

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On May 10, 2024, the Commodity Futures Trading Commission (CFTC or Commission) proposed amendments to CFTC Regulation 40.11 (the Proposed Rule) that further define...

United StatesFinance and Banking
Matthew B. Kulkin
Matthew B. Kulkin
Megan O'Flynn
Megan O'Flynn
Ayana Dow
Ayana Dow
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On May 10, 2024, the Commodity Futures Trading Commission (CFTC or Commission) proposed amendments to CFTC Regulation 40.11 (the Proposed Rule) that further define "gaming" contracts considered "contrary to the public interest" under section 5c(c)(5)(C) of the Commodity Exchange Act (CEA).1

This is the latest development in the Commission's long-standing effort to address event contracts that are based on political and economic indicators, and other event contracts considered "gaming." We have previously written about the Fifth Circuit litigation involving PredictIt and the CFTC's order related to political event contracts of KalshiEX LLC (access our prior alert here).

While litigations related to PredictIt and KalshiEX LLC make their way through the courts,2 the Commission's vote to approve the proposal demonstrates its ongoing interest in codifying its views around what event contracts may be impermissible gaming under the CEA. The Proposed Rule, if

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