According to Commodity Futures Trading Commission Chairman Mike Selig, the agency will persist in defending its sole regulatory authority over prediction markets in court. Selig emphasized that the CFTC's jurisdiction applies to all prediction markets, regardless of the subject matter, as long as they are offered within a CFTC-regulated exchange. The CFTC's lawsuits against several states are intended to establish its exclusive regulatory authority over commodity derivatives markets. A recent court ruling has bolstered the agency's position, and Selig believes that the statute clearly grants the CFTC regulatory oversight of swaps on federally regulated markets.
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 states. Selig noted that the agency's view is that the statute clearly subjects trades on federally regulated markets to federal regulation, regardless of the underlying event. The CFTC is also reviewing comments on its interpretative guidance with the Securities and Exchange Commission and is open to suggestions on its oversight of prediction markets.