CFTC Chair Selig seeks federal preemption of prediction markets as state AGs push back
CFTC Chairman Michael Selig is pushing for federal preemption of prediction market oversight, seeking to limit state-level regulatory interventions and standardize rules under the CFTC. Incoming chair Selig, who took office several months ago, argues this would reduce the patchwork of state-by-state compliance burdens platforms currently face. The federal push drew pushback from state attorneys general: Illinois Attorney General Kwame Raoul urged the CFTC on May 1 to recognize state authority over sports-related prediction markets, and North Carolina Attorney General Jeff Jackson joined other state AGs in a formal comment filed under the National Association of Attorneys General banner arguing prediction markets should be subject to state rather than federal oversight. Selig also defended the agency's jurisdiction in response to critical characterizations of prediction markets as gambling and discussed insider trading boundaries in event contracts during a March 9 interview.
Forces platforms like Kalshi and Polymarket to navigate an intensifying federal-state jurisdictional conflict with no clear resolution timeline, leaving their state-by-state compliance strategies and potential expansion plans in limbo as Selig stakes out preemption and AGs dig in on state gambling law authority.