from trading on such markets. We discuss next the question of whether certain event contracts are prohibited from trading on DCMs.
Regulation of Election, Gaming and Sports Related Event Contracts
CFTC Regulation 40.11 prohibits any event contract based on an excluded commodity from being listed by a DCM or cleared by a DCO if the contract references: Terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law; or An activity similar to the above categories and is determined by the CFTC to be contrary to the public interest. CEA section 1a(19) defines “excluded commodity” to include “an occurrence, extent of an occurrence, or contingency (other than a change in the price, rate, value, or level of a commodity not described in [CEA section 1a19)(i)]” that is:
“Beyond the control of the parties to the relevant contract, agreement, or transaction”; and
“Associated with a financial, commercial, or economic consequence.”
In the 2011 adopting release for CFTC Regulation 40.11, the CFTC noted that its prohibition of event contracts referencing “gaming” was “consistent with Congress’s intent to ‘prevent gambling through the futures markets’ and to ‘protect the public interest from gaming and other events contracts.’” 23 In June 2024, the CFTC proposed to amend CFTC Regulation 40.11 to further define the categories of event contracts that may be deemed contrary to the public interest such that they may not be listed for trading or accepted for clearing. 24 Most significantly, the proposed amendments had sought to define the term “gaming” as “the staking or risking by any person of something of value upon:
The outcome of a contest of others;
The outcome of a game involving skill or chance;
The performance of one or more competitors in one or more contests or games; or
Other occurrence or non-occurrence in connection with one or more contests or games. 25
23 Provisions Common to Registered Entities, 76 Fed. Reg. 44776, 44786 (July 27, 2011).
24 Event Contracts, 89 Fed. Reg. 48968 (June 10, 2024).
Id. at 48992.
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March 2026 / Page 9
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