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 stated, "Regardless of the subject matter, whether it's sports, politics, or anything else, if it's a valid product offered within a CFTC-regulated exchange, we have the authority to regulate it." The CFTC is currently engaged in lawsuits against several states, including Arizona, Illinois, and Connecticut, to establish its regulatory authority over prediction markets. Selig highlighted that a recent Third Circuit Court ruling supporting the CFTC's oversight of prediction markets has strengthened the agency's position.
The chairman also noted that the CFTC is undertaking a significant litigation effort to argue that prediction markets provide derivatives products under the Commodity Exchange Act, rather than gambling services regulated by states. Selig emphasized that the statute clearly indicates that transactions on federally regulated Designated Contract Markets are subject to federal regulation, and states cannot override this authority.
The CFTC is also involved in a formal rulemaking process to clarify its oversight of prediction markets and is open to suggestions on this process.