By Kenneth Corbin

The head of the Commodity Futures Trading Commission has a message for state authorities: Prediction markets are a federal matter and not yours to attempt to regulate. CFTC Chairman Michael Selig on Tuesday promised that his agency would continue its campaign of suing to block states from exerting authority over prediction markets.

Selig, speaking at a conference in Washington convened by Finra, the brokerage industry's self-regulatory organization, argued that prediction markets -- as opposed to gambling books maintained by a casino, for instance -- are derivatives sold on exchanges that, by law, are only regulated by the CFTC.

"When I came into office at the CFTC I quickly learned that various states were bringing legal actions -- cease-and-desist orders -- against CFTC-registered exchanges," he said. "They're not subject to state law under our statute," which deems those exchanges "subject exclusively to the CFTC's regulatory authority," Selig said Tuesday.

Various states have attempted to assert authority over prediction markets through state gambling laws, just as they would regulate a sports book operating within their borders. Selig acknowledged that prediction markets, especially when the contract in question involves sports, can be seen as a "parallel product" to that offered by a casino, but he said they are fundamentally different from a regulatory perspective.

"When I saw many of these states such as Nevada bringing legal charges against our exchanges saying they were violating state gambling laws and gaming laws I was very concerned about this because we as an agency have to comprehensively oversee these markets," he said. "We have sued about five or six states now. We will continue to bring lawsuits against these states to the extent that they're infringing on the CFTC's exclusive regulatory authority over derivatives markets."

On April 28, the CFTC announced that it had filed a lawsuit against Wisconsin following that state's civil litigation targeting five prediction markets: Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase. A few days earlier the CFTC had announced a similar lawsuit against New York, asserting exclusive jurisdiction over prediction-market exchanges in both cases.

Selig argues that beyond protecting his agency's jurisdiction, the litigation furthers his broader goal of eliminating duplicative and potentially conflicting regulations. The most visible aspect of that effort so far has been the CFTC's public coordination with the Securities and Exchange Commission regarding the crypto sector.

The two agencies, which have a history of engaging in turf wars in crypto and other areas, have reached a memorandum of understanding, and are holding regular meetings between senior leaders and staffers to coordinate their policymaking and oversight of the sector.

On Tuesday, Selig blasted the regulatory confusion that can come from two agencies sending different messages, such as in the recent past when the SEC claimed that most crypto offerings are securities while the CFTC considered them commodities. So with prediction markets, he said it is essential that the companies in that space understand that they are overseen by a single federal entity that, he argues, pre-empts state jurisdiction.

He said he expects to be working more closely with the SEC if the crypto regulation bill under debate in Congress moves forward. If signed into law, the Clarity Act would require the SEC and CFTC to work together on a series of rulemakings setting policy in the crypto industry.

"We have a real opportunity here for greater collaboration" among regulators, Selig said. "Not to merge the identities or flatten important differences, but to align the organizations in ways that help regulators and market participants."

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May 12, 2026 15:04 ET (19:04 GMT)