Commodity Futures Trading Commission Chairman Mike Selig emphasized that the agency will persist in defending its sole regulatory authority over prediction markets in court. According to Selig, the agency's regulatory purview encompasses any valid product offered within a CFTC-regulated exchange, regardless of the underlying event. The CFTC's lawsuits against several states aim to establish its exclusive authority over commodity derivatives markets. A recent Third Circuit Court ruling supporting the CFTC's oversight of prediction markets has bolstered the agency's position.
Under Selig's leadership, the CFTC has pursued litigation to assert that prediction markets provide derivatives products under the Commodity Exchange Act, rather than gambling services regulated by states. The agency's view is that federal regulation applies to transactions on federally regulated Designated Contract Markets, superseding state laws.