Breaks down the legal fight over whether sports event contracts are "swaps" under the Commodity Exchange Act, which would give the CFTC exclusive jurisdiction and preempt state gambling laws. Courts are split across 19 pending federal lawsuits, with the Third Circuit ruling in Kalshi's favor. The case hinges on how broadly to read two phrases in Dodd-Frank's swap definition and will likely reach the Supreme Court within two years.

Congressional Research Service legal sidebar analyzing whether and how insider trading law applies to prediction markets. Walks through SEC Rule 10b-5, CFTC Rule 180.1, the STOCK Act, and Title 18 criminal statutes, then examines the CFTC's February 2026 advisory on two Kalshi enforcement actions. Identifies the core gap: existing law requires breach of a duty, but many prediction market insiders (e.g., a political candidate betting on his own race) may not owe one. Surveys four pending bills in the 119th Congress that would close this gap in different ways.

Written by a former CFTC General Counsel, argues that courts in sports event contract litigation are overlooking the strongest basis for CFTC jurisdiction: the Commodity Exchange Act's 'commonly known to the trade' catchall, which classifies any transaction the derivatives industry calls a swap as one. Since every exchange, broker, and clearinghouse involved treats sports event contracts as swaps, the test resolves the federal preemption question cleanly while preserving state authority over off-exchange sports betting.