On December 12, 2025, international derivatives marketplace CME Group has issued a notice regarding sports-related Event Contract Swaps.

The notice is in line with guidance provided by the Commodity Futures Trading Commission (CFTC).

Earlier in December, Chicago Mercantile Exchange Inc. (CME) listed for trading sports-related Event Contract Swaps and may in the future list additional sports-related Event Contract Swaps.

Several designated contract markets (DCMs) are currently listing sports-related event contracts. These contracts have been listed as swaps on the DCMs, and as such, are subject to the exclusive jurisdiction of the CFTC. DCMs have asserted that, based on such classification, the Commodity Exchange Act (“CEA”) preempts the application of state gambling, wagering, and gaming laws to such contracts.

CME notes that, notwithstanding the foregoing, there are various forms of state regulatory actions and pending and potential state and federal court litigation concerning the legality of sports-related event contract swaps listed on DCMs.

For the avoidance of doubt, CME primarily operates an intermediated clearing model whereby Clearing Members – who are predominantly futures commission merchants (FCMs) – provide access to CME for their underlying customers.

CME does not directly onboard retail customers in any state.

However, Clearing Members and their market participant customers may be deemed to be operating or engaging in activity within a state whose gaming authorities or other agencies have taken a formal action (via advisory letter, cease and desist letter, or court filing) asserting that sports-related event contracts are being offered contrary to state law.

CME warns that it is important for market participants to understand that an FCM or Clearing Member may require the liquidation or close-out of sports-related event contract swaps for customers or non-customers in a given jurisdiction, should the FCM or Clearing Member determine that it is necessary in order to comply with applicable law or as otherwise may be necessary and permitted under applicable rules or clearing agreements.