CFTC Chairman Mike Selig stated that the agency will continue to assert its 'exclusive regulatory authority' over prediction markets in court, emphasizing that any product offered within a CFTC-regulated exchange falls under federal regulation, regardless of the subject matter. The agency's lawsuits against several states aim to clarify its jurisdiction over commodity derivatives markets, bolstered by a recent Third Circuit Court ruling. Selig highlighted that the Commodity Exchange Act clearly subjects swaps on federally regulated markets to federal oversight, superseding state gambling laws.
The CFTC is engaged in a significant litigation effort to establish that prediction markets provide derivatives products rather than gambling services, with further legal actions possible. The agency is also undergoing a formal rulemaking process to clarify its oversight of prediction markets and is open to suggestions on this process.