We already knew that Michael Selig’s CFTC was taking a different tack on prediction markets. His appointment as Chairman ended Caroline Pham’s prolonged spell as Acting Chairperson, and it also ended a policy of tiptoeing around any controversy.
There has long been a clear sense that the CFTC was sympathetic to prediction markets, so the core motivations may not have changed massively. But the tone has changed dramatically and intentionally.
Selig’s coordinated three-pronged defense of the sector gives us an insight into the CFTC’s new strategy. In one fell swoop, we have a Wall Street Journal Op-Ed, a to-camera video announcement on X and the filing of a ‘Friend of the Court Brief’ in support of Crypto.com, and by proxy, the entire prediction market sector. He and the CFTC are talking the talk and walking the walk.
The remaining question is whether there is any substance in the arguments it has now unequivocally aligned itself with. Arguably, the precise words and tactics deployed by Selig serve more to highlight the precarious foundations of prediction markets than to buttress them.
How did Caroline Pham’s CFTC talk about prediction markets?
It isn’t that Pham, formerly the Acting Chairperson, would not be drawn on prediction markets – the head of the CFTC could hardly fail to refer to them.
But as far as sports contracts and the controversial aspects of prediction markets, Pham’s CFTC stayed out of it.
A joint public statement made in September 2025, signed by Pham and the Chairman of the Securities and Exchange Commission (SEC), Paul Atkins, lays out the pair’s joint outlook for the future.
The statement perfectly sums up the CFTC’s attitude – it touches briefly on event contracts, reading: “Prediction markets, while they have existed around the world for decades, are undergoing rapid growth with growing demand from both market operators and the public. We should work together to provide clarity for innovators that want to list event contracts on prediction markets responsibly, including those based on securities. The SEC and CFTC should examine opportunities to collaborate to consider where event contracts may be made available to US market participants regardless of where the jurisdictional lines fall.”
There is no judgement on the question of what constitutes gambling, no word on the state gambling regulators and whether they have the legal right to intervene in prediction markets. But, reading between the lines, it’s clear the purpose behind pointing out that prediction markets have been around for decades. The CFTC is unsubtly implying that Kalshi, Polymarket, etc, are fundamentally no different from or less permissible than the Omaha Grain Exchange, approved as a DCM in 1937.
The subtext is all there, if not in black and white, then in gray and white – there is plenty of talk of innovation and making sure that regulation doesn’t stand in the way of progress.
The statutory definition of 'commodity' is extraordinarily broad and includes practically all goods, articles, services, rights and interests except for onions
What has been Michael Selig’s approach to talking about prediction markets?
The Wall Street Journal piece and Selig’s steely X address serve the same purpose: they want to unpick all of that subtext and implication, and replace it with direct, unequivocal backing.
The platforms are named, the legal challenges are specified and lambasted. The final words of Selig’s video are: “To those who seek to challenge our authority in this space, let me be clear, we will see you in court.”
We have been moving in this direction. Prediction market CEOs have been named as part of the CFTC’s Innovation Council, and Selig has already been vocal in his support of the sector. The intended tonal shift here is now from explicit support to aggressive, offensive support.
Is this a powerful defense or a filibuster?
Having said all that, there is something that feels almost oddly comical about Selig’s approach. In his Wall Street Journal article, he defines event contracts as financial instruments that “help market participants hedge risk, aggregate information and test hypotheses about future outcomes.”
This is, in some ways true, but to labor this point feels totally incongruous with the newly direct approach. He then goes on to reference that: “Kalshi, Polymarket, Coinbase and Crypto.com face an onslaught of state-driven litigation across the country, with nearly 50 active cases presenting a range of legal challenges.”
The controversy around prediction markets is not new to anyone in the industry. And, as a result, we all know it’s not the risk hedging that gets the goat of regulators. To corrupt a James Carville quote: “It’s the sports contracts, stupid!”
Without adding anything new to the argument in defense of these companies, it seems odd to draw attention to the discrepancy between the traditional use of futures trading and the current debate around prediction markets.
The piece gets stranger. Perhaps the most trivial part of the piece is the most telling. Selig dives into the history of the Commodity Exchange Act, its economic function and usage. He even digresses to tell the readers: “The statutory definition of “commodity” is extraordinarily broad and includes practically all goods, articles, services, rights and interests except for onions (due to a history of market manipulation) and movie box-office receipts (because of Hollywood lobbying).”
It almost says everything, that in the most direct and significant polemic against the state regulators fighting prediction markets, we find ourselves, just five paragraphs in, talking, not about sports betting, but about onions.
In 2025, Selig was Chief Counsel for the cryptocurrency task force at the Securities and Exchange Commission
