Lynnae Williams Journalist
Lynnae is a journalist covering the intersection of technology, culture, and gambling. She has more than five years of experience as a writer and editor, with bylines at SlashGear and MakeUseOf. On the iGaming side,...
Read Full BioA coalition of more than 20 United States senators has formally asked the Commodity Futures Trading Commission (CFTC) to stay out of ongoing legal battles over prediction markets. The group, led by Senators Adam Schiff (D-CA) and Catherine Cortez Masto (D-NV), pointed to recent actions by CFTC Chairman Michael Selig to “greenlight” prediction markets for sports and political events as a “stark reversal of prior statements before Congress” just a few months ago.
In a letter sent to Selig on February 13, the lawmakers expressed their deep concern over his recent policy shifts. The group is calling for the CFTC to maintain its long-standing prohibitions on event contracts related to “gaming, war, terrorism, and assassination.”
The letter specifically speaks to the “real-world consequences” of these platforms, writing that the products they currently offer “mirror sportsbook wagers,” while “[evading] state and tribal consumer protections, generate no public revenue, and undermine sovereign regulatory regimes.”
The senators framed the ask as consistent with the position Selig took during his confirmation process. At that time, when asked whether betting on the outcome of a professional football game is gambling, Selig responded: “I would look to the courts.”
Senators Say The Statutory Test Is Clear For Prohibited Contracts
Central to the Senators’ argument is that the Commodity Exchange Act already bars certain categories of event contracts, including those involving “gaming (including sports), war, terrorism, assassination, or other enumerated activities,” which they say “may not be listed, traded, or cleared.”
They also argue that once a contract falls into an enumerated category, “the public-interest analysis is complete.” In the Senators’ opinion, that leaves the CFTC little wiggle room for treating these restrictions as a flexible policy question, especially through litigation strategy or selective court participation.
In the letter, the lawmakers highlighted what they described as a recent change in Selig’s public posture following his confirmation last December, citing statements he’s made saying he “strong[ly] disagrees” that prediction markets violate the law.
CFTC Signals More Direct Engagement As It Moves Toward New Rules
The Senators’ letter comes as the CFTC appears to be changing its posture toward prediction markets. In late January at the CFTC and SEC Joint Event on Harmonization, Selig said: “I have directed CFTC staff to withdraw the 2024 event contracts rule proposal that would prohibit political and sports-related event contracts,” and criticized prior staff guidance as something that “has instead contributed to uncertainty in our markets.”
At the event, he also signaled that the CFTC may be open to taking an active role in court fights going forward. Selig said he’d instructed his staff “to reassess the Commission’s participation” in matters already pending in federal courts, adding that “the Commission has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives.”
These statements are exactly what have caused concern for the Senators. Their letter reads as a warning: if the CFTC starts weighing in on lawsuits while simultaneously moving toward new prediction-market rules, lawmakers will see it as the agency tilting the playing field in a still-unresolved dispute over where derivatives end, and gambling begins.
