Prediction markets receive strongest backing yet from new CFTC chair
Summary
Newly appointed CFTC Chairman Michael Selig publicly backed prediction markets and sports-event contracts during a speech at CFTC headquarters, signalling a clear shift from previous administrations. He announced the withdrawal of a 2024 proposed rule that would have banned political and sports-related event contracts and ordered the removal of an internal advisory note that had created legal uncertainty.
Selig set out four steps for the commission: reverse prior guidance, begin rulemaking for event contracts, reassess CFTC participation in related court cases, and increase coordination with the SEC to draw clearer lines between commodities and securities. The comments come as the Senate Agriculture Committee advanced the Digital Commodity Intermediaries Act, which would extend new powers and funding to the CFTC and formalise SEC-CFTC collaboration.
The development deepens a split within the gaming industry: trade groups such as the American Gaming Association oppose prediction markets and want them banned from crypto legislation, while the Coalition for Prediction Markets (including Kalshi, Robinhood and Underdog) praised Selig’s approach and welcomed clearer regulation.
Key Points
- Selig affirmed CFTC support for lawful innovation in event contracts and prediction markets, calling for clear rules and standards.
- The CFTC will withdraw a 2024 proposed prohibition on political and sports event contracts and an internal advisory that caused market uncertainty.
- The commission will begin drafting an event-contracts rule to provide certainty for market participants.
- Selig directed staff to reassess the CFTC’s role in ongoing litigation where jurisdiction is contested.
- Heightened SEC-CFTC cooperation was promised to clarify whether novel products are commodities or securities.
- The Senate committee advanced the Digital Commodity Intermediaries Act, potentially giving the CFTC new authority, funding and registration regimes for digital commodities and spot markets.
- The gaming industry is divided: the AGA and tribal groups seek bans on sports-event contracts, while industry coalitions supporting prediction markets have welcomed the CFTC’s stance.
Context and relevance
This is a potentially pivotal regulatory moment for prediction markets, crypto-linked products and market operators. If the CFTC follows through, expect clearer onshore rules, reduced legal ambiguity for platforms and a shift in where responsibility lies for novel financial instruments. The move also ties into broader Washington activity — congressional bills and inter-agency coordination — that could reshape how digital and event-based contracts are regulated in the US.
Why should I read this?
Because this could change everything for anyone tracking prediction markets, sports-betting tech or crypto regulation. Selig’s remarks signal the CFTC may stop litigating by enforcement and instead write clear rules — which means winners and losers will emerge fast. If you care about market access, legal risk or who gets to regulate what, this is one to skim now and read properly if you’re involved.
Author style
Punchy: the piece cuts to the chase — this is about regulatory clarity that matters to operators, lawmakers and incumbents. Read the detail if you need to act; otherwise, the summary saves you time.