CFTC presses case that sports betting is finance, seeks to block Arizona enforcement

Federal lawsuit argues event contracts are swaps under U.S. law, not state-level gaming law, deepening a split with states that view the products as illegal gambling What to know : Federal regulators are asking a court to block Arizona from applying its gambling laws to prediction market operator Kalshi, arguing that its sports and event contracts are financial derivatives known as swaps. The Commodity Futures Trading Commission and the Justice Department contend that because these contracts pay out based on future events with economic consequences, they fall under the Commodity Exchange Act and federal, not state, jurisdiction. Court decisions in this dispute could determine whether prediction markets operate nationwide under a single federal framework or remain subject to a patchwork of state gambling regimes.