CFTC chair Mike Selig is pushing back hard in the fight over prediction markets, telling CoinDesk the agency will continue to defend its “exclusive regulatory authority” in court.
Speaking at Vanderbilt’s Digital Assets and Emerging Tech Policy Summit in Nashville, Selig said the Commodity Futures Trading Commission’s lawsuits against Arizona, Illinois and Connecticut are intended to make clear that federal rules — not state gambling laws — govern commodity derivatives offered on regulated exchanges. He pointed to a recent Third Circuit ruling as bolstering the agency’s position.
“It doesn't matter if it's on sports, politics or anything else,” Selig said. “If it's a validly offered product within a CFTC‑regulated exchange, then we regulate that, and the states don't have the ability to nullify federal oversight and substitute gambling laws where derivatives laws apply.”
Why it matters
The dispute centers on whether certain prediction markets are derivatives subject to the Commodity Exchange Act — and therefore under CFTC jurisdiction — or gambling services that states can block. Under the Dodd-Frank Act, the CFTC can regulate swaps and can prohibit types of contracts it deems contrary to the public interest (including those tied to war, terrorism, assassination, gaming or illegal activity). Selig emphasized that even when a public‑interest analysis is required, deciding that question remains within the CFTC’s exclusive remit.
Legal strategy and scope
Selig said the agency’s litigation campaign is intended to shore up the legal view that prediction markets offered on federally regulated Designated Contract Markets (DCMs) fall under federal oversight. He didn’t rule out further suits — noting Nevada and Massachusetts, which secured preliminary injunctions against prediction‑market platforms, could still be targets — and flagged the CFTC’s amicus brief in a consolidated Ninth Circuit case (which covers Nevada) that is set to be heard soon.
Rulemaking and interagency alignment
Beyond litigation, the CFTC is engaged in formal rulemaking to clarify how it will oversee prediction markets and said it remains open to public input on that process. Selig also addressed cross‑agency coordination with the SEC: the two agencies recently published a final interpretation and are developing a taxonomy intended to make it easier to determine whether a tokenized product is a security or a commodity. That framework, he said, should streamline self‑certification of futures tied to digital assets and reduce jurisdictional friction.
“We should be very much aligned across agencies,” Selig added, noting that the guidance gives both markets and regulators clearer examples to follow.
Selig will be speaking next month at CoinDesk’s Consensus event in Miami as the CFTC continues its dual track of litigation and rulemaking to assert federal control over prediction markets.
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