Commodity Futures Trading Commission Chairman Mike Selig emphasized that the agency will persist in defending its sole regulatory authority over prediction markets in court, stressing that any valid product offered within a CFTC-regulated exchange falls under federal oversight, regardless of the subject matter. Selig's remarks were made on the sidelines of the Digital Assets and Emerging Tech Policy Summit, where he clarified that the CFTC's lawsuits against several states are intended to establish the agency's exclusive regulatory authority in commodity derivatives markets.
A recent Third Circuit Court ruling supporting the CFTC's oversight of prediction markets has bolstered the agency's position, according to Selig. The CFTC is currently engaged in a significant litigation effort to establish that prediction markets provide derivatives products under the Commodity Exchange Act, rather than gambling services regulated by individual states. Selig noted that the agency's view is clear: when a swap is offered on a federally regulated Designated Contract Market, those transactions are subject to federal regulation, and states cannot supersede federal oversight with their own gambling laws. The CFTC Chairman also mentioned that the agency is open to suggestions as it undergoes the formal rulemaking process to clarify its oversight of prediction markets, and is considering provisions of the Dodd-Frank Act in this regard.