CFTC Chair Says Will Continue to Defend Agency’s Exclusive Regulatory Authority Over Prediction Markets

Recently, CFTC Chair Mike Selig stated at the Vanderbilt University Digital Asset Summit that the agency will continue to defend its "exclusive regulatory authority" over prediction markets in court.

Selig emphasized that whether in sports, politics, or other fields, as long as the derivatives are legally offered on exchanges regulated by the CFTC, they fall under federal regulation, and states have no authority to replace federal derivatives laws with gambling laws for regulation.

This stance is closely related to the CFTC’s current legal actions. The agency is suing Arizona, Illinois, and Connecticut, explicitly asserting that the CFTC has exclusive regulatory authority over commodity derivatives markets.

Selig pointed out that the recent ruling by the Third Circuit Court further supports the CFTC’s view that prediction markets should be regarded as derivatives products under the Commodity Exchange Act, rather than gambling services within the scope of state regulation.

Legally, Selig cited the Dodd-Frank Act, stating that the CFTC not only has authority to regulate swap contracts but can also, based on public interest considerations, prohibit related contracts involving war, terrorism, assassination, gambling, and other illegal activities.

Selig also emphasized that even if related contracts require public interest review, the regulatory authority remains exclusively with the CFTC.

Currently, the CFTC is working through a formal rulemaking process to clarify its regulatory framework for prediction markets. Selig said the agency is open to relevant regulatory proposals and will conduct careful review based on the provisions of the Dodd-Frank Act.

Additionally, he mentioned that the CFTC will collaborate with the U.S. Securities and Exchange Commission (SEC) to review the final interpretive guidance issued last month, ensuring both agencies maintain a consistent stance on digital asset regulation.

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