The proposed amendment also listed illustrative examples of activities that constitute gaming. These included:
A political contest, including an election or elections;
An awards contest, or a game in which one or more athletes compete; or
An occurrence or non-occurrence in connection with such a contest or game, regardless of whether it directly affects the outcome. 26 In short, the proposed amendments would have effectively prohibited all election and sports- related event contracts, which comprise a significant portion of the trading volume in the burgeoning event contract space. On February 4, 2026, the CFTC withdrew the outstanding proposal to amend CFTC Regulation 40.11. Shortly thereafter, on March 12, 2026, the CFTC issued the Request, which, among other things, specifically seeks comment on the CFTC’s ability under CFTC Regulation 40.11 to deem an event contract that falls within one of the enumerated categories to be “contrary to the public interest” and therefore prohibited. The CFTC requests comment on the factors it should consider in making this type of a public interest determination. Further, the CFTC seeks input on: The interaction between the public interests set out in CEA section 3 and the public interest determination under CFTC Regulation 40.11; Whether the “economic purpose” test included in a past version of the CEA should inform the public interest determination 27 ; How considerations of hedging and other commercial purposes should inform the public interest determination; The application of the purposes of the CEA set out in CEA section 3(b) 28 to event contracts; and
Id.
26
27 Between 1974 and 2000, pursuant to then-section 5(g) of the CEA, the listing of any commodity futures contract was subject to a process requiring the CFTC’s pre-approval of the contract’s terms and conditions. Under that regime, the CFTC’s now-rescinded Appendix A to Part 5-Guideline No. 1 (Interpretive Statement Regarding Economic and Public Interest Requirements for Contract Market Designation) required the DCM to furnish to the CFTC, among other things, information relating to whether “a proposed contract reasonably can be expected to be used for hedging and/or price basing on more than an occasional basis.” In 2000, the Commodity Futures Modernization Act repealed then-section 5(g). 28 CEA section 3(b) states: “It is the purpose of this chapter to serve the public interests described in subsection (a) through a system of effective self-regulation of trading facilities, clearing systems, market participants and market professionals under the oversight of the Commission. To foster these public interests, it is further the purpose of this chapter to deter and prevent price manipulation or any other disruptions to market integrity; to ensure the financial integrity of all transactions subject to this chapter and the avoidance of systemic risk; to protect all market participants from fraudulent or other abusive sales practices and misuses of customer assets; and to promote responsible innovation and fair competition among boards of trade, other markets and market participants.”
March 2026 / Page 10
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