The US CFTC insists that sports betting falls under the financial category and seeks to prevent enforcement actions in Arizona.

ME News Report, April 9 (UTC+8), in court documents filed on the evening of April 8, the U.S. Commodity Futures Trading Commission (CFTC) and the Department of Justice requested that the federal court prevent the state of Arizona from enforcing its gambling laws against prediction market operator Kalshi. The regulatory agencies believe that contracts based on real-world events such as sports and elections are financial derivatives called “swaps” and should be regulated by federal authorities rather than state-level gambling laws. Arizona has filed criminal charges against Kalshi, arguing that sports event outcome contracts are no different from traditional bets and should be regulated as gambling. A federal court in New Jersey recently issued a ruling favorable to Kalshi, determining that its sports contracts are generally permitted under federal law, but courts in other jurisdictions tend to support the state’s position. The outcome of this case will determine whether prediction markets operate nationwide under a unified federal framework or are subject to varying state gambling regulations. (Source: PANews)