Commodity Futures Trading Commission Chairman Michael Selig has doubled down on his assertion that prediction markets like Kalshi and Polymarket do not offer gambling services.
Speaking during an appearance on the Glenn Beck Podcast, Selig repeated his assertion that the commission is the only body in the US with the power to police operating permit-holding prediction market providers.
“Prediction markets on politics, sports, and other things have been around for a long time,” Selig said.
“[There is] a distinction between prediction markets, which offer event contracts – that is a type of financial instrument – and gambling, which is done in a casino.“
The comments come just days after a judge ordered Kalshi to temporarily stop offering sports-related contracts in Michigan or pay a $120,000-per-day fine. The prediction market operator said it would comply with the order, but intended to fight it in court.
Prediction Markets: Exclusive Jurisdiction Applies, Says CFTC
During the podcast appearance, Selig repeated many of the same assertions that the CFTC has used in its legal cases against the states that have tried to apply their gambling law to Kalshi, Polymarket, and others.
“The [Commodity] Exchange Act and the securities laws [grant the CFTC] express authority to regulate these types of financial instruments,“ the commission chief said. “And that covers off any sort of state regulation of those products as gambling.“
Contracts are Financial Products, Selig Claims
Selig also mentioned the notion of “exclusive jurisdiction,“ the legal concept that only the CFTC can police the activities of prediction market players.
In April, Selig issued similarly worded warnings. He called state efforts to ban, restrict, and tax Kalshi and the like “illegal enforcement actions against CFTC-regulated exchanges.”
The CFTC called attorneys general interventions “an ongoing campaign of state encroachment.”
During his appearance on Glenn Beck’s show, Selig said there was a clear distinction between the products available in casinos and those traded on prediction market platforms.
“When you create a financial instrument […] it trades in a financial market,” Selig said. “So there is a really high bar to be able to trade and offer that product. There are investor protections.”
The CFTC Chairman said prediction market users’ trades go through order books. This involves matching them with a counterparty on the prediction market platform.
Prediction markets also clear transactions through a clearinghouse, he added.
“You don’t have any of those protections when you walk into a casino. And that is for a good reason, because that is entertainment,” said Selig.
Bookmakers and casinos, he continued, do not match trades with counterparties, but take “the other side” of a gambler’s position.
“So they are […] looking at the data and saying these are the odds,” Selig said.
He concluded: “And they will bet against you, essentially. So they are going to give you worse terms, because they always make money. And the casinos are always making money. And they are able to serve you alcohol and do all these things because they are entertainment businesses.”
States Hold Firm
Despite all of Selig’s claims, states are refusing to back down. Several attorneys general have attempted to sue Kalshi, Polymarket, and others, including Crypto.com.
Some state lawmakers have also attempted to intervene by introducing bills to ban or restrict services in their jurisdictions.
Tribal leaders have also asked courts to intervene.
But prediction markets have hit back, claiming that casino lobbyists have helped state officials draft documents.
Lawyers have told CasinoBeats that the matter will likely be decided by the Supreme Court or Congress. However, some legal experts say the commission could have the edge over the states if SCOTUS is forced to take a side in the argument.
Selig, meanwhile, also took to X on July 7 to write: “It’s imperative that we future-proof our markets for the next 250 years.”
