CFTC Chair Monitoring Minnesota Legislation on Prediction Markets

The Commodity Futures Trading Commission is taking an increasing number of states to court over prediction markets. Chair Mike Selig is monitoring Minnesota and other states that advance legislation that would ban or regulate them, a person familiar with his thinking told Semafor.

Selig has filed lawsuits against five states that tried to restrict such markets. He praised a district judge’s Tuesday decision to block Arizona from suing Kalshi, saying the ruling reaffirmed the CFTC's full jurisdiction. That decision follows a federal appeals court ruling last month that sided with Kalshi over New Jersey.

The outcomes have raised the industry's hopes that the Supreme Court will take up the issue.

Minnesota’s legislature has shown interest in the issue. Federal lawmakers have also recently indicated they may weigh in despite differing views on jurisdiction. One industry executive told Semafor that legislation should not be required because courts should clarify the law.

The executive pointed to a bill backed by Kalshi from Sens. Dave McCormick and Kirsten Gillibrand as a potential exception that would build a more complete regulatory structure.

A different bipartisan proposal from Sens.

Adam Schiff and John Curtis would ban prediction markets from offering wagers on sports. The House could soon follow the Senate in blocking its members and staff from using prediction markets. A spokesperson for House Minority Leader Hakeem Jeffries told Semafor that he was generally supportive of the Senate’s push.

Jeffries had said earlier this year that it would be reasonable to examine the issue. States and tribes maintain that prediction markets constitute gambling and should fall under their jurisdiction. Selig has argued that users are trading event contracts, making the CFTC the exclusive regulator.