We are the sole regulator of fast-growing predictions market, CFTC tells court

The Commodity Futures Trading Commission has taken its position into federal court, with a filing that reinforces its claim of exclusive authority over prediction markets and related commodity derivatives.

The CFTC submitted an amicus curiae brief to the US Circuit Court of Appeals for the Ninth Circuit on Tuesday, in the case North American Derivatives Exchange, Inc. et al v. The State of Nevada. The filing challenges efforts by state regulators to impose their own oversight on markets where participants trade contracts tied to the outcome of future events, commonly known as prediction markets.

In a statement, CFTC Chairman Michael S. Selig said that:, CFTC Chairman Michael S. Selig stated that: “CFTC-registered exchanges have faced an onslaught of lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets. This power grab ignores the law and decades of precedent,” underscoring the agency’s position that regulatory authority in this area rests solely at the federal level.

Meanwhile, a federal appellate court judge has refused to shield predictions market platform Kalshi from a lawsuit brought by the Nevada Gaming Control Board, allowing state regulators to continue pursuing claims that the platform unlawfully offered event-based contracts tied to sports outcomes without proper authorization. The decision marks a procedural loss for the New York-based firm, which argues that its contracts are federally regulated financial instruments overseen by the Commodity Futures Trading Commission rather than subject to Nevada’s gambling laws. By declining to halt the state proceedings, the court has set the stage for a deeper clash over whether prediction markets fall under federal commodities regulation or state gaming authority.

The predictions markets have been growing among consumers and has even seen a warming of sentiment on Wall Street.  This month’s Super Bowl highlighted the extent of consumer interest with more than a billion dollars reportedly staked on outcomes related to the event including around $24 million from those convinced that Mark Wahlberg would attend the event (it hasn’t been confirmed either way).

According to the CFTC, Congress and the courts have consistently affirmed the agency’s jurisdiction over commodity derivatives markets. The brief argues that prediction markets fall squarely within that mandate and that state-level interference risks disrupting a nationally regulated framework.

It also notes its longstanding engagement with event contracts, referencing its 1992 action involving the Iowa Electronic Markets. Subsequent legislative reforms, including those enacted after the 2008 financial crisis, further clarified and expanded the CFTC’s authority over commodity-based derivatives.

Chairman Selig also emphasized the economic role of these instruments, stating, “Event contracts allow businesses and individuals to hedge event-driven risks, enable investors to manage portfolio exposure, and provide the public with information about the outcome of future events.”

By entering the appellate dispute, the CFTC is defending what it describes as decades of established federal jurisdiction. The outcome of the case could have significant implications for how prediction markets and similar financial products are regulated across the United States.