Event contract

The designated exchanges in this catalogue list "event contracts", and so, in this catalogue's own words, does an on-chain order book on Base or Polygon whose terms bar US traders. That is deliberate. The phrase is the plainest accurate noun for the thing being traded, and the site uses it precisely because it does not carry a verdict. The mistake is reading a verdict into it anyway.

How it works

The mechanics are the same everywhere. A question with a fixed end — a date, a published number, a final score — is written down with rules for what counts as Yes. A contract pays a fixed amount if Yes and nothing if No. The CFTC's own explainer describes them as "often based on yes-no scenarios", with "a fixed payout (usually $1) and an expiration (either a specific time or the natural conclusion of the event)". Because the payout is fixed, the price of a contract between zero and the payout reads directly as the market's probability: 37 cents on a one-dollar contract is 37 percent.

The payout is funded by the other side, not by the venue. On the Polymarket card, one Yes plus one No always redeems for a dollar, and a winning share redeems for a dollar after resolution. On a regulated exchange the same arithmetic runs through the clearing house. Either way, a position bought at 37 cents risks 37 cents to make 63, and the other 63 cents of that dollar came from whoever holds No.

Names differ by venue, not by mechanism. Kalshi and the brokers in front of it say contracts. Polymarket and Limitless say shares, and on-chain they are tokens. A multi-outcome question — who wins an election with eight candidates — is usually a set of separate Yes/No contracts, one per candidate, rather than one contract with eight outcomes. That matters when a question is matched across venues: two markets titled the same can be one contract on one venue and eight on another.

The phrase is not a legal category

The Commodity Exchange Act does not define it. The CFTC said so in a footnote to its June 2026 proposed rule: "the term 'event contract' is not a defined term in the CEA or the Commission regulations thereunder", though the Commission has used it since at least 2008 to describe commodity derivatives, often with a binary payoff, based on the outcome of an occurrence or event.

In the section of the statute that deals with them, the words appear only in headings. 7 U.S.C. 7a-2(c)(5)(C) is titled "Special rule for review and approval of event contracts and swaps contracts", and its first clause is headed "Event contracts". The operative text under it speaks of agreements, contracts, transactions or swaps in excluded commodities "based upon the occurrence, extent of an occurrence, or contingency", listed by a designated contract market or swap execution facility, and lets the Commission find them contrary to the public interest if they involve unlawful activity, terrorism, assassination, war, gaming, or other similar activity it names by rule. A contract so found may not be listed. The legal question is never "is this an event contract" but which statutory category it falls into, and whether that category lets a state regulate it — the dispute set out in event contract or swap.

Why it matters here

It is the word this site uses instead of the contested ones. Whether a regulated event exchange is doing something a state may forbid is the question actually being litigated, and the words a state notice uses for it take a side. The catalogue's house rule is to describe the instrument — an event contract, a position, a trade — and name the documents that argue about what it is. When a card says "event contract" about an on-chain venue, it is describing a payoff, not claiming that venue sits inside the CFTC framework.

It tells you nothing about who holds your money. The same one-dollar Yes contract can sit on a designated exchange you reach directly, on the same exchange through a futures commission merchant, or in a wallet as a token on a chain. Those three differ on identity checks, on fees, on who sends a tax form and on who decides the outcome. The card's markets.settlement field — cash, crypto or play money — and its availability block carry that difference; the noun does not. The exchange side of it is under designated contract market.

It tells you nothing about your state either. A venue calling its product an event contract and a state regulator calling it something else can both be acting in good faith, because what the product is under the Commodity Exchange Act is exactly what is unresolved. Whether it reaches you is its own question, answered in why a venue is unavailable where you are.

It tells you nothing about the question underneath. Two contracts with identical titles on two venues are two contracts: different rules text, different settlement source, different authority deciding the outcome. The fixed payout makes their prices look comparable, and they are comparable only after the rules have been read side by side — which is the work described in who decides the outcome.

The price reads as a probability only before costs. Thirty-seven cents is 37 percent before the fee, the spread and the months your collateral is locked. A one-dollar contract bought at 97 cents and resolving in eleven months returns three cents, before fees, on capital held for that long. The fee side is in what a trade actually costs, the time side in what your money does while you wait.