CFTC Chair Weighs Lawsuits Against States Regulating Prediction Markets

CFTC Chair Mike Selig said Thursday he is weighing lawsuits against additional states that attempt to regulate prediction markets, following the agency's suit last month against Minnesota after its governor enacted a ban. Selig, 36, told Semafor the agency is evaluating similar action “across the country” and will act wherever a state law conflicts with federal authority under the Commodity Exchange Act.

He said the CFTC has exclusive jurisdiction over event-contract derivatives and that the statute is clear on its face.

Selig stated he would welcome a Supreme Court ruling on CFTC jurisdiction. He added that Congress settled the matter when it drafted the Commodity Exchange Act and that lawmakers can amend the statute if they have concerns. The agency floated new rules this week that would limit wagers on sports while prohibiting contracts on war, terrorism, or assassinations.

Selig said the CFTC is proposing a common-sense definition of gaming that includes sports, recreational, and entertainment games, and is setting out factors to assess public interest, including integrity considerations and national-security concerns for contracts tied to terrorism or war in the Middle East.

For sports contracts, Selig said the CFTC will consider factors such as injuries, officiating calls, and league approval. He stated that platforms like Kalshi and Polymarket could ensure listings are approved by the leagues.

The CFTC issued an advance notice of proposed rulemaking on prediction markets and received nearly 1,500 comments. Selig said the agency will review each comment and is not taking the process lightly. Sens.