U.S. CFTC in talks with every major pro sports league on policing prediction markets
Chairman Michael Selig says the agency has already taken several states to court to prove that sports contracts aren’t just betting but that they’re derivatives.
What to know:
- The CFTC is expanding oversight of sports-related prediction markets, pursuing cooperation with other major U.S. professional leagues to police insider trading and manipulation after having signed a data-sharing deal with Major League Baseball.
- Chairman Michael Selig said the agency has sued a number of states over efforts to block federally regulated event contracts, arguing that CFTC-listed derivatives fall under federal authority rather than state gaming laws.
- Regulators are sharpening their approach to insider trading in prediction markets and are reviewing exchange-traded products tied to these markets in coordination with the SEC, reflecting a broader Trump-era shift toward embracing prediction and crypto-linked financial products.
The regulator is seeking broader cooperation with leagues to monitor insider trading and market manipulation tied to event contracts, Selig said Tuesday at the annual FINRA conference in Washington D.C. on Tuesday, following an earlier CFTC announcement of a data-sharing agreement with Major League Baseball in March.
“We’ve entered into a memorandum of understanding with Major League Baseball, and we’re in talks with all the professional sports leagues,” Selig said at the event, hosted by the brokerage industry’s self-regulatory organization.
The CFTC agreement with baseball was its first formal information-sharing deal with a professional sports organization. The arrangement comes as federally regulated prediction markets such as Kalshi and Polymarket move deeper into sports contracts, triggering disputes with state gaming regulators over who controls the sector.
Selig took an aggressive stance on that legal fight. He said the CFTC has already sued “about five or six states” over attempts to block federally regulated event contracts and pledged the agency would continue bringing cases against states that challenge the commission’s authority. Under U.S. law, derivatives listed on CFTC-regulated exchanges fall under federal oversight rather than state gaming laws, he’s repeatedly argued.
