CFTC Files Brief Claiming Exclusive Jurisdiction Over Prediction Markets

The Commodity Futures Trading Commission announced on Tuesday that it has filed a friend-of-the-court brief to assert exclusive federal jurisdiction over prediction markets, escalating a legal battle with states seeking to restrict these platforms as unlicensed gambling operations.

CFTC Chair Mike Selig, appointed by President Donald Trump, made the declaration in a video posted to the social media platform X, formerly Twitter. He described the move as a response to an onslaught of state-led litigation over the past year against companies such as Kalshi and Polymarket. These platforms enable users to trade contracts based on the outcomes of future events, with pricing between one cent and 99 cents reflecting the market's estimated probability of occurrence. Selig emphasized that the CFTC has regulated such event contracts as derivatives for more than two decades, arguing they serve legitimate purposes like hedging commercial risks from weather fluctuations or energy price changes and providing checks on information accuracy.

The brief supports the CFTC's position in an ongoing appeal before the U.S. Court of Appeals for the 9th Circuit, stemming from a lawsuit by Nevada...