CFTC Chair Michael Selig has intensified a federal–state showdown over prediction markets, directing his agency to intervene in court battles and publicly asserting that the US derivatives watchdog, not state authorities, holds jurisdiction over event contracts.
In a video posted Tuesday on X, Selig said the Commodity Futures Trading Commission had filed an amicus brief to defend what he called its “exclusive jurisdiction” over prediction markets, which he equated with derivatives markets.
Selig Defends Federal Authority, Signals Policy Shift
Selig warned that state entities challenging the CFTC’s authority over event contracts “will see” the agency “in court,” framing state enforcement as an “onslaught of state-led litigation” targeting platforms including Coinbase, Crypto.com, Kalshi and Polymarket.
He said the CFTC has regulated such markets for more than two decades and argued that prediction markets allow Americans to hedge commercial risks, such as temperature or energy-price moves, and act as a check on news and information flows.
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Selig’s stance represents a reversal from the agency’s prior efforts to shut down some political and event contracts at firms such as Polymarket and Kalshi before Donald Trump returned to the White House. Courts resisted parts of that earlier crackdown, and the CFTC dropped its litigation after Trump’s team overhauled the agency’s leadership.
States and Senators Push Back on Gambling Concerns
Utah Governor Spencer Cox publicly challenged Selig’s claims, writing on X that he did not recall the CFTC having authority over a “derivative market” for “LeBron James rebounds.”
Cox called the products “gambling pure and simple,” said they harm families and young men, and pledged to use every power to “beat” the CFTC in court. Utah lawmakers are advancing a bill targeting certain sports contracts, although the state has not led the main enforcement cases.
Polymarket has sued Massachusetts, arguing only the CFTC can police its markets, while Coinbase is suing Connecticut, Illinois and Michigan over efforts to classify related products as gaming.
