**[CFTC Draws the Line: Prediction Markets Classified as Derivatives, Gambling Excluded]** According to Deep Tide TechFlow on October 11, as reported by *Decrypt*, the U.S. Commodity Futures Trading Commission (CFTC) issued two measures on Friday to formally define the legal status of prediction markets and distinguish them from gambling. The first proposed rule expands the definition of "swap" to include event contracts, covering areas such as sports, politics, and culture. The second interim final rule stipulates that casino-style gambling products (such as sports betting and casino games) do not fall within the scope of the derivatives definition. CFTC Chairman Michael Selig stated that event contracts are classified as commodity derivatives and fall under the exclusive jurisdiction of the agency, whereas gambling products are not considered derivatives. This move aims to establish federal regulatory authority and address ongoing illegal gambling lawsuits filed by various states against platforms like Polymarket and Kalshi. The two rules have initiated a 30-day public comment period or will take effect immediately.