Further Definition of “Swap” To Exclude Casino-Style Gambling Products

Key dates

2026-10-19

The interim final rule becomes effective and 17 CFR 1.3 is amended to exclude qualifying casino-style gambling products from the CEA swap definition.

2026-11-18 Deadline

Comments on the interim final rule must be received by the CFTC through the specified submission channels.

Suggested considerations

• Firms offering sportsbook, casino, lottery, raffle, bingo, or other gaming products should consider documenting how each product satisfies both the Provider Test and Product Test, including the relevant state or tribal authorization and applicable gaming-law classification.
• Gaming operators should consider verifying that the provider is acting within the scope of its license or authorization and retaining evidence that the transaction is offered on house or other standardized terms rather than traded through a multilateral or individually negotiated market.
• Prediction-market operators, designated contract markets, swap execution facilities, swap dealers, and banks should consider reviewing event-linked products separately from traditional sportsbook wagers, with particular attention to venue, price formation, trading structure, and whether participants interact through competing bids and offers.
• Firms should consider reassessing products that combine sportsbook or casino-style features with exchange trading, bilateral dealer negotiation, or other market mechanisms, because the rule’s exclusion may not apply even where the underlying event resembles a conventional wager.
• Compliance teams may wish to update product inventories, legal opinions, customer disclosures, jurisdictional analyses, and surveillance or onboarding controls to reflect the distinction between authorized house wagers and exchange-traded event contracts.
• Interested parties should consider submitting comments to the CFTC on the Provider Test, the definition of transactions regulated as gaming or gambling, and alternative ways to distinguish swaps from traditional gambling products by November 18, 2026.
• Firms should consider separately assessing state gaming, tribal gaming, consumer-protection, tax, anti-money-laundering, and licensing requirements because exclusion from the CEA swap definition does not remove those obligations.

What changed

New 17 CFR 1.3(7) creates a two-part exclusion from the swap definition. Under the Provider Test, the product must be offered or entered into by a person licensed or otherwise authorized under state law or by a federally recognized Indian tribe under the Indian Gaming Regulatory Act, the provider must act within the scope of that authorization, and the transaction must be regulated as gaming or gambling under applicable state or tribal law. Under the Product Test, the transaction must not be traded on a board of trade, organized exchange, swap execution facility, or another market in which trades are executed multilaterally or subject to individual negotiation. The rule expressly identifies qualifying sports wagers, casino table games, slot machines and electronic gaming devices, bingo, po

Who is affected

• State-licensed sportsbooks and sports-wagering operators
• State-licensed casino operators and other licensed gaming businesses
• Federally recognized Indian tribes and tribal gaming operators regulated under the Indian Gaming Regulatory Act
• Prediction-market operators and designated contract markets offering event contracts
• Swap execution facilities, swap dealers, banks, and other firms assessing whether event-linked products are swaps
• Compliance, legal, and product-governance teams responsible for classifying event contracts and wagering products

Related regulations

• Commodity Exchange Act section 1a(47)
• 17 CFR 1.3
• Dodd-Frank Act section 712(d)(1)
• 15 U.S.C. 8302(d)(1)
• Indian Gaming Regulatory Act, 25 U.S.C. 2701 et seq.
• 17 CFR 145.9