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Rule 40.11 enumerating "gaming" (among other specific things) as a specific category of underlying events is referring to the underlying event itself. Not other activities ancillary to the underlying event. The underlying event of a sports event contract is the sporting event itself. Sports existed before gambling on sports. Elections existed before gambling on elections. Weather existed before gambling on the weather.
Calling a sport contest "gaming" and inferring that the contest itself is gambling is not supported from a common sense standpoint and certainly not supported from a legal standpoint. My kid isn't participating in gambling when playing tee-ball and Sam Darnold isn't participating in gambling when playing in the Super Bowl.
Sportsbooks hanging a line and not immediately funding their payout on a time-price priority marketplace is not a swap and thus not subject to federal regulation. That's why sportsbook licensing (in some states) exists at the state level. And why sports prediction market licensing exists at the federal level.
If 40.11 was supposed to include underlying activity involving "sports", it would have specifically and expressly listed "sports" as an enumerated category. It doesn't.
Regardless, whether 40.11 applies to a CFTC-registered institution is EXCLUSIVELY the CFTC's jurisdiction and not the patchwork of possible interpretations of each of the 50 states.
The global sports industry is in the trillions of dollars. Saying there is no economic impact to the outcome or occurrence of specific sporting events is laughable.
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