WASHINGTON — Members of the House Committee on Agriculture pressed Commodity Futures Trading Commission (CFTC) Chairman Michael Selig on Thursday to explain how exchange betting on sports events aligns with the agency’s traditional focus on regulating financial derivatives.
During a heated hearing, Selig, who admitted to lawmakers that he is “not an expert” on betting lines, aggressively defended the CFTC’s stance that federal law gives the commission exclusive jurisdiction over sports-themed event contracts and prediction markets.
Under Selig’s leadership, the CFTC has rapidly waded into a massive turf war with state gaming regulators. Platforms like Kalshi, Polymarket, and Crypto.com have increasingly offered sports-based prediction contracts, prompting crackdowns from state gaming boards in New Jersey and Nevada who argue the products are indistinguishable from traditional sports betting.
Selig, who was appointed by President Donald Trump and sworn in last December, has refused to back down. He previously stated that the CFTC will “no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction,” and recently filed amicus briefs supporting prediction exchanges against state bans.
Thursday’s testimony, however, highlighted growing bipartisan frustration with the CFTC’s direction.
Lawmakers challenged Selig over his decision to push forward with sweeping financial rulemaking while operating as the sole sitting commissioner on the typically five-member panel. Selig rebuffed requests to pause the agency’s agenda, arguing that ongoing efforts to establish market safeguards cannot wait for additional Senate confirmations.
The hearing also took a contentious turn when Democrats raised conflict of interest concerns regarding the Trump administration’s ties to the prediction market industry. Rep. Jim McGovern (D-MA) pointedly noted that the president’s eldest son, Donald Trump Jr., serves as an adviser for prediction market giants Kalshi and Polymarket. McGovern questioned the potential for insider trading and political favoritism in the lightly regulated space.
Selig forcefully rejected the accusations, insisting that the CFTC maintains strict independence and a zero-tolerance policy for market manipulation. “We treat all market participants alike,” Selig told the committee. “We do not pick winners and losers or engage in favoritism or bring politics into any of these matters.”
The CFTC’s aggressive posture has spurred swift legislative blowback. Senators Adam Schiff (D-Calif.), John Curtis (R-Utah), and Catherine Cortez Masto (D-Nev.) recently introduced the bipartisan Prediction Markets Are Gambling Act. The bill seeks to explicitly prohibit CFTC-registered entities from listing prediction contracts that resemble sports bets or casino-style games, effectively attempting to return the oversight of sports wagers entirely to state and tribal jurisdictions.
As the legal battles between the federal government and state gaming divisions play out in the federal appellate courts, the rapid rise of prediction markets continues to blur the lines between traditional financial derivatives and sports betting.
Leo Falsafi is a digital marketing veteran and senior journalist at Virlan.co, where he covers the intersection of digital marketing, gaming, and breaking US trending news. With nearly two decades of hands-on experience in SEO and digital strategy, Leo has consulted for and scaled hundreds of companies. His deep industry roots allow him to deliver sharp, fact-checked insights and analysis on the trends shaping today's digital landscape.