According to Commodity Futures Trading Commission Chairman Mike Selig, the agency will persist in defending its exclusive right to regulate prediction markets in court. Selig emphasized that the CFTC's authority applies to any valid product offered within a CFTC-regulated exchange, regardless of the subject matter. The CFTC is currently engaged in lawsuits against several states, including Arizona, Illinois, and Connecticut, to establish its regulatory authority over commodity derivatives markets. Selig's comments come after a recent Third Circuit Court ruling that supported the CFTC's oversight of prediction markets.
The agency is also involved in a major 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 CFTC has the power to regulate swaps and can block certain types based on public interest, and that the agency is going through a formal rulemaking process to clarify its oversight of prediction markets.