The Commodity Futures Trading Commission is facing more opposition from states over the agency’s bid to be the sole regulator of prediction markets.
Utah Governor Spencer Cox said Tuesday that he would exhaust the resources of his office to push back against the CFTC after Chairman Michael Selig asserted the agency had “exclusive jurisdiction” over exchanges like Kalshi Inc. and Crypto.com.
At the core of the battle is whether prediction markets should be considered federally-regulated derivative exchanges, as the companies and the CFTC argue, or betting platforms regulated by the states.
“Mike, I appreciate you attempting this with a straight face, but I don’t remember the CFTC having authority over the ‘derivative market’ of LeBron James rebounds,” Cox said in a post on X. Gambling is prohibited in Utah.
His comments come after Selig wrote in a Wall Street Journal op-ed the agency would file a friend-of-the-court brief backing Crypto.com’s position in the Ninth US Circuit Court of Appeals.
“The CFTC will no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction over these markets,” Selig said on Monday.
Utah has previously joined amicus briefs in cases against Kalshi and numerous state regulators have filed legal challenges against the industry.
The comments mark the latest embrace of prediction markets, where customers place wagers on everything from sports to the weather, from the agency head.
Selig, who was sworn in as chair in December, had called prediction markets a “complex issue” when asked at his confirmation hearing in November whether CFTC regulations prohibit gaming.
“Really, to the extent that any of these event contracts constitute gaming, of course, you know, that is a question for the courts,” he said at the time. Since taking the top job at the regulator though, he has embraced the industry.
“Strong disagree,” Selig posted on X earlier this month when former New Jersey Governor Chris Christie said that he believed the event contracts violated state laws. Christie now serves as an adviser to the American Gaming Association.
Selig also said last month the CFTC would craft new rules for the multi-billion dollar industry, which has surged since the agency lost a challenge in 2024 to keep the wagers at bay under then Chairman Rostin Behnam.
Carl Kennedy, a former special counsel at the regulator, said Selig defending the agency’s turf is not a surprise and that Congress gave the CFTC and the Securities and Exchange Commission broad authority to work together to define swaps.
“He’s thinking of that clear mandate,” Kennedy said.
