Commodity Futures Trading Commission Chairman Mike Selig emphasized that the agency will persist in defending its exclusive regulatory authority over prediction markets in court. Selig stated, 'Regardless of the subject, whether sports, politics, or otherwise, if a product is validly offered within a CFTC-regulated exchange, it falls under our regulatory purview.' The CFTC is currently engaged in lawsuits against several states, including Arizona, Illinois, and Connecticut, to establish its 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.
Selig noted that the Commodity Exchange Act clearly states that transactions on federally regulated Designated Contract Markets are subject to federal regulation, superseding state laws. The CFTC is also involved in a formal rulemaking process to clarify its oversight of prediction markets and is open to suggestions on the process.