According to Commodity Futures Trading Commission Chairman Mike Selig, the agency is committed to upholding its 'exclusive regulatory authority' over prediction markets in court. Selig emphasized that the CFTC's jurisdiction 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. A recent Third Circuit Court ruling has bolstered the agency's position. Under Selig's leadership, the CFTC has launched a significant litigation effort to argue that prediction markets offer derivatives products under the Commodity Exchange Act, rather than gambling services regulated by states.
The agency's view is that the statute clearly states that transactions on federally regulated Designated Contract Markets are subject to federal regulation, and states cannot override this authority. Selig noted that the CFTC may pursue further action against other states, and the agency has filed an amicus brief in a consolidated case before the Ninth Circuit Court of Appeals. The CFTC is also undergoing a formal rulemaking process to clarify its oversight of prediction markets and is open to suggestions on this process.