CFTC chair to state representatives: The fight is with us, not prediction markets
Mike Selig claims states are wasting their own taxpayers’ dollars suing “participants that are complying with federal law”
Commodity Futures Trading Commission (CFTC) chair Mike Selig has argued states should target his regulatory body in the courts instead of prediction market platforms.
The two-hour hearing was held by the House of Representatives’ Agriculture committee for members to voice their concerns about federally regulated event contracts, as well as other CFTC business.
Selig’s comment comes after he pledged to support prediction market platforms in state-level legal battles. Kalshi and other operators are embroiled in legal issues in several states.
Most of the states involved accuse the companies of offering sports betting without a license. Ohio recently hit Kalshi with a $5m fine, becoming the first jurisdiction to pursue a monetary penalty, while Arizona is pursuing criminal charges against the platform.
Selig said at the hearing: “The concern is, when states start suing our registrants, this is not the right fight. The fight is with us.
“That just wastes your own state’s taxpayer dollars in suing participants that are complying with federal law.
“So, if you want to fight with us, we’ll fight with you in court, but the real work should be done in the policy spectrum.
“Come in and comment, and we’ll work with you all to get the policy right.”
The CFTC recently filed lawsuits against Arizona, Connecticut, and Illinois with the aim of reasserting its jurisdiction over prediction markets after the states took legal action to hinder the operations of the event contract providers.
Concerns over allegations of insider trading were also raised at the hearing with one congressman citing the presence of the president’s son, Donald Trump Jr, on the boards of both Kalshi and Polymarket.
House Representative Jim McGovern said: “The president’s son is on the board of both multi-billion-dollar prediction market companies.
“So it seems to me, the only reason two competing companies hired the same person is because they think he must be really, really, really valuable. I wonder why they would think that?”
Polymarket is not yet live in the US officially. It is due to return after acquiring CFTC-registered QCEX last year.
Selig said: “We have a zero-tolerance policy when it comes to insider trading, fraud or manipulation.”
Meanwhile, Congressman Gabe Vasquez presented Selig with a visual portrayal of the similarities between sports event contracts and sports betting.
He showed two offers from a recent MLB game and asked Selig to determine which had come from a sportsbook and which a prediction market.
Selig responded: “I am not an expert on identifying betting lines.”