Event Contract Enforcement Act

Full Title:
Event Contract Enforcement Act

Summary#

This bill changes the Commodity Exchange Act to make many "event contracts" illegal to list or trade on a registered trading entity. An "event contract" here means an agreement, contract, transaction, or swap in an excluded commodity that is based on an occurrence, the extent of an occurrence, or a contingency. The bill says these contracts would be unlawful when based on activity that is illegal under Federal or State law, terrorism, assassination, war, gaming, the result of any vote in a federal, state, or local election (including ballot initiatives), conduct by any level or branch of government or its personnel, or other similar activities the Commodity Futures Trading Commission (CFTC) finds contrary to the public interest. The bill lets a State opt out of the ban on gaming-related contracts if the State law expressly exempts that conduct. It also adds a definition: "gaming" means any part of a live, simulated, or virtual physical or mental challenge or a game of chance. The changes take effect 180 days after the bill becomes law.

What it means for you#

  • Exchanges and other registered trading platforms would not be allowed to list or make available for trading event contracts tied to the listed topics.
  • Traders and firms that create or sell event-based contracts would need to stop offering those contracts if they fall under the banned categories.
  • States can explicitly allow gaming-related contracts by passing or keeping a state law that exempts such conduct from the federal ban.
  • The CFTC can add other activities to the banned list by rule if it finds them contrary to the public interest.
  • The rule changes apply to contracts in "excluded commodities" as referenced in the Commodity Exchange Act and to registered entities.

Expenses#

No publicly available information.

Proponents' View#

The text of the bill frames these event contracts as contrary to the public interest and seeks to prohibit them. It also provides a clear, state-level exemption for gaming contracts if a State law expressly allows them.

Opponents' View#

No publicly available information.