Commodity Futures Trading Commission Chairman Mike Selig emphasized that the agency will persist in defending its exclusive regulatory authority over prediction markets in court, stressing that any product offered within a CFTC-regulated exchange falls under their jurisdiction, regardless of the subject matter. Selig's remarks came on the sidelines of the Digital Assets and Emerging Tech Policy Summit, where he underscored the CFTC's lawsuits against several states as a means to clarify its regulatory dominance in commodity derivatives markets.
The chairman pointed to a recent Third Circuit Court ruling as bolstering the agency's position. Under Selig's leadership, the CFTC has been actively litigating to establish that prediction markets offer derivatives products under the Commodity Exchange Act, rather than state-regulated gambling services. He noted that the statute clearly subjects transactions on federally regulated markets to federal regulation, preempting state gambling laws. When asked about the selective litigation against certain states, Selig hinted that these initial cases may not be the last, referencing an upcoming hearing in the Ninth Circuit Court of Appeals, which includes Nevada.
The CFTC's regulatory oversight includes the power to block swaps deemed contrary to the public interest, such as those based on war, terrorism, or gaming. Selig emphasized that the agency's authority to conduct public interest analyses does not diminish its exclusive regulatory authority. The CFTC is currently engaged in a rulemaking process to clarify its prediction market oversight and has published interpretative guidance with the SEC, aiming to provide clear lines for distinguishing between commodities and securities in the context of digital assets.