CFTC chair nominee Michael Selig told the Senate Agriculture Committee that he would follow court decisions on whether sports event contracts constitute gaming. Senators asked how he would address sports prediction markets if confirmed; a confirmation vote was scheduled for that afternoon.
Selig’s approach could shape how federal oversight of sports event contracts develops if he is confirmed.
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At a Senate Agriculture Committee hearing, Senator Adam Schiff questioned CFTC nominee Brian Quintenz about whether sports event contracts could undermine tribal sovereignty and gaming compacts. Quintenz said the Commodities Exchange Act permits contracts tied to events with commercial, financial or economic consequences, and said he would hear tribal concerns.
CFTC chairman Michael Selig said prediction markets offer financial instruments rather than gambling, arguing that the commission has authority over permit-holding providers. His comments followed a Michigan judge’s order requiring Kalshi to stop offering sports-related contracts temporarily or face a $120,000-per-day fine; Kalshi said it would comply while challenging the order in court.
The chairman of Nevada's gaming regulator was among industry figures who warned about casino-style prediction markets at the NCLGS Summer Meeting in July. Prediction markets have expanded rapidly into products functionally similar to sports betting over the past 18 months.
Italy's ADM is the focus of a report comparing US court rulings with the European Commission's MiCA consultation. The report says the Sixth Circuit ruled on 25 September that Kalshi's sports contracts were not swaps and that Ohio and Tennessee could apply their gambling laws; the Commission consultation asks whether blockchain-based prediction markets should fall under MiFID or MiCA.
US states are challenging prediction markets that offer event contracts they argue amount to sports betting, according to the report. The dispute concerns whether the Commodity Futures Trading Commission or state gambling authorities have regulatory authority, and which consumer protections apply.