#PredictionMarketsCFTCBacking
Prediction markets raise new tests for CFTC
February 17
Yesterday
1. Federal backing and jurisdiction:
The Commodity Futures Trading Commission (CFTC), under Chairman Michael Selig, is publicly asserting that it has exclusive federal authority to regulate prediction markets — platforms where people trade contracts tied to outcomes (e.g., elections, sports, economic data). The CFTC filed legal briefs supporting this position, arguing these are federally regulated derivatives (“event contracts”) and not just gambling. �
CFTC
2. Shift in regulatory stance:
The CFTC has withdrawn a previous proposal to ban sports and political prediction markets, signaling a move toward clearer rules and support for innovation in this area. This backing is intended to give legal certainty to operators and markets. �
FinanceFeeds
3. Legal clash with states:
Several U.S. states (e.g., Nevada) disagree, suing to classify these markets as illegal gambling and asserting their own authority to block them. The CFTC is preparing to defend its jurisdiction in federal court, possibly up to the Supreme Court. �
Axios +1
4. Industry and political context:
Federal support has clashed with state gaming regulators and some political figures who warn these markets resemble betting and can cause social harm. Meanwhile, supporters highlight prediction markets’ claimed benefits, like risk hedging and information signalling. �
Business Insider
Bottom line: The CFTC’s backing of prediction markets marks a major regulatory pivot that could shape whether these platforms operate under federal finance laws rather than state gambling rules — a development with huge implications for crypto-finance, derivatives trading, and online wagering in the U.S.$BTC
