Michael Selig stated that the US financial regulator had submitted an amicus brief in opposition to what he termed an “onslaught of state-led litigation” against prediction markets.
Michael Selig, who is in charge of the US Commodity Futures Trading Commission under President Donald Trump, said that the commission would respond to what he called a “onslaught of state-led litigation” against prediction market companies.
Selig said in a video posted on X on Tuesday that the CFTC has submitted an amicus brief, sometimes known as a “friend of the court” brief, to “defend its exclusive jurisdiction” over prediction markets, which he compared to derivative markets. The chair said that any state-level groups that want to challenge the CFTC’s power over these markets would have to go to court.
Selig stated, Prediction markets aren’t new; the CFTC has been in charge of them for more than 20 years. They help society by letting regular Americans protect themselves from business risks and they also keep an eye on our news media and information streams.
Selig’s comments came after a number of state-level regulators and agencies filed lawsuits against prediction sites that sell event contracts, including as Coinbase, Crypto.com, Kalshi, and Polymarket. Polymarket filed a lawsuit against the state of Massachusetts last week, asserting that only the CFTC, as a federal regulator, possesses the authority to monitor these types of exchanges.
State enforcement actions and industry pushback
Since the state-led enforcement efforts, the CFTC chairman has been making even more public pronouncements in favour of prediction markets. On Monday, the Wall Street Journal published an op-ed by Selig in which he repeated his claim that states were “encroaching” on the CFTC’s power.
On Friday, 23 US senators issued a letter to Selig asking him to “abstain from intervening in pending litigation” regarding event contracts and to “realign the Commission’s actions with the statute and with the testimony” he gave to Congress during his confirmation process. During a hearing in November, Selig said he would look to the court for advice.
The senators told Selig, ‘Your recent comments instead suggest that you view the prohibitions of Congress as subject to reinterpretation through regulatory posture or litigation strategy.’ That way of thinking turns a law against something into a policy decision made on a case-by-case basis. It also puts the Commission in direct competition with state and tribal governments whose gambling laws Congress opted not to override.
Market structure legislation remains pending
For months, US senators have been thinking about a bill that would establish up a digital asset market. The House of Representatives enacted it in July under the CLARITY Act. The Senate Agriculture Committee decided to move the bill forward in January, but as of Tuesday, it was still unclear whether the bill would have enough support to pass a vote in the entire Senate.
Selig was going to talk about how the bill was going at an event put on by the Trump family-backed crypto platform World Liberty Financial at the president’s Mar-a-Lago club in Florida on Tuesday.