Prediction markets receive strongest backing yet from new CFTC chair
Summary
New CFTC Chairman Michael Selig publicly affirmed support for prediction markets and sports-event contracts, announcing the withdrawal of a 2024 proposed rule banning political and sports event contracts and a staff advisory that had created uncertainty. He instructed staff to draft a dedicated event-contracts rulemaking, reassess the Commission’s participation in ongoing court cases over jurisdiction, and pursue closer coordination with the SEC. His remarks come as the Senate Agriculture Committee advances the Digital Commodity Intermediaries Act and amid a deep split in the gaming industry between bookmakers, tribal groups and prediction-market firms.
Key Points
- Selig pledged that the CFTC will support “lawful innovation” in prediction markets and sports-event contracts.
- He ordered withdrawal of a proposed 2024 rule and an internal staff advisory that had increased legal uncertainty for event contracts.
- The Commission will move to draft clear rulemaking on event contracts to provide certainty for market participants.
- Selig directed staff to reassess the CFTC’s role in pending court cases where jurisdiction over event contracts is contested.
- He emphasised greater coordination with the SEC to draw clearer lines between commodity and security products.
- The Senate committee advanced the Digital Commodity Intermediaries Act, which would expand CFTC authority over digital commodities and add consumer protections.
- The growth of prediction markets has split the gaming sector: the AGA and tribal groups oppose them, while a Coalition for Prediction Markets welcomed the Commission’s planned clarity.
Context and Relevance
Clear CFTC backing and formal rulemaking could reshape how prediction markets operate in the US, affecting crypto-linked instruments, sports betting dynamics and numerous lawsuits currently challenging jurisdiction. The outcome will matter to exchanges, bookmakers, tribal gaming authorities, investors and lawmakers negotiating broader crypto and digital-commodity legislation. Regulatory clarity would reduce litigation risk, guide product development and influence which regulator oversees emerging markets.
Why should I read this?
Short version: this is a big deal. The new CFTC chair is openly backing prediction markets, pulling back hostile guidance and promising proper rulemaking. If you care about sports betting, crypto, fintech or gaming regulation, this saves you time by spelling out what’s likely to change and who’s on which side of the fight.