In terms of gambling, the US Commodity Futures Trading Commission (CFTC) has appeared something of a non-entity in the past few months.
Reluctant overseer of its troublesome prediction market children in Kalshi, Polymarket and others, its partial resistance to those operators seemed less to resolve than simply to dissolve into the air. Kalshi and co. have been fighting the same battle over and over again in different states, and the CFTC is conspicuous in its lack of any explicit involvement. But will things start to change now that Michael Selig has been confirmed as the new permanent Chair?
Maybe not. Or at least not any time soon.
Selig will be replacing Acting Chair Caroline Pham as she leaves to join crypto firm, MoonPay. So while there are five Commissioner slots at the CFTC, Selig will be the only one, Chair of a theoretical five-strong team of decision makers that is no more than theoretical. Complaints of understaffing have leaked out of the CFTC over the past year, and the shortage of Commissioners at the top does nothing to dispel the fears that the regulator has ground to a bit of a halt.
Why are there no Commissioners?
President Joe Biden's Chair, Rostin Benham, resigned back in January, with Commissioner and Republican Caroline Pham being installed as a temporary fix until President Donald Trump's administration could prepare its permanent pick. The new President and his team were always likely to want to shake up the CFTC leadership and Brian Quintenz was Trump's pick. His nomination, however, was a disaster and fell apart by the summer. Temporary stop-gap, Pham, remained in situ.
An organization like the CFTC can lose its effectiveness gradually. It was formed in 1974, but its function has changed constantly. It is always playing catch up with itself and with what traders and markets are doing. The Commodity Exchange Act was originally drawn up to federally regulate swaps and trading in the Agricultural sector. Well, the CFTC's remit is far beyond that now and, if the Government agenda was interested in getting a strong regulatory grip on crypto and prediction markets, a lot of work would have to go into training and staffing to bring the CFTC up to scratch.
The fact is, as the President's own family becomes deeper involved in crypto business interests and prediction markets, regulation is not a particularly pressing concern. And so that leadership sinkhole at the CFTC has just got wider and wider.
What will Selig bring to the role?
Selig's most recent roles were Chief Counsel of the Securities and Exchange Commission's Crypto Task Force and Senior Advisor to SEC Chairman Paul S. Atkins. His background behind that is in law and, in that part of his career, he has represented many CFTC-licensed bodies.
So here is a modernizing move. This is someone with operational understanding of digital currencies and emerging financial technologies. His experience all looks to be in the right places. But the other most notable thing about those experiences is that they aren't all that extensive.
Neither in fact were Pham's when she was selected as Acting Chair. These aren't junior figures by any means, but nor have either seemed strong independent voices or actors in the financial space. And if that's the case, it seems unlikely Selig's appointment is going to bring about any unexpected friction with the President's agenda.
What does this mean for the gaming industry?
It is notable that in Selig's SEC roles, he is described as having "worked to put an end to regulation by enforcement." As far as the prediction markets that have come to dominate industry conversations in the US, enforcement from the CFTC has seemed a very distant thought indeed. But if you thought this new appointment was going to make that a possibility, you may need to think again.
As he was sworn in he gave some clue of how his tenure will look: "We are at a unique moment as a wide range of novel technologies, products and platforms are emerging, retail participation in the commodity markets is at an all-time high, and Congress is poised to send digital asset market structure legislation to the President's desk, cementing the US as the Crypto Capital of the World."
Based on the recent appointments of Shayne Coplan, Polymarket CEO and Tarek Mansour, Kalshi CEO, to the CFTC's inaugural CEO Innovation Council, what before was support by inaction seems poised to become a much more active championing of 'novel technologies.'
Selig's career began in 2014 as a law clerk for CFTC Commissioner J Christopher Giancarlo
