Sports bets on prediction markets ruled to be "swaps," exempt from state laws (arstechnica.com)

A federal appeals court ruled that New Jersey cannot apply its sports-gambling laws to Kalshi’s prediction-market “sports-event contracts,” finding they are “swaps” executed on a CFTC-licensed designated contract market and therefore fall under the CFTC’s exclusive jurisdiction. The majority held that federal commodity law preempts state efforts to regulate trades on CFTC-regulated platforms, while a dissent said the products are essentially indistinguishable from traditional sportsbook bets. The decision is part of ongoing litigation and regulatory disputes, with the CFTC also challenging state approaches in other lawsuits and lawmakers proposing new legislation to clarify jurisdiction over similar contracts.