CFTC Chairman Mike Selig emphasized that the agency will continue to assert its 'exclusive regulatory authority' over prediction markets in court, stating that any valid product offered within a CFTC-regulated exchange falls under their regulation, regardless of the subject matter. The CFTC is currently involved in lawsuits against several states, including Arizona, Illinois, and Connecticut, to establish its authority over commodity derivatives markets. Selig pointed out that a recent Third Circuit Court ruling reinforced the CFTC's position, and the agency is committed to defending its territory. The CFTC's litigation effort aims to clarify that prediction markets provide derivatives products under the Commodity Exchange Act, rather than gambling services regulated by states.
Selig noted that the agency's view is clear: when a swap is offered on a federally regulated Designated Contract Market, the transaction is subject to federal regulation, and states cannot override federal oversight with their own gambling laws.