Senate Democrats Press CFTC to Halt Expansion of Prediction Markets

Senate Democrats urged CFTC Chair Michael Selig to reverse regulatory changes they say are enabling the growth of prediction markets tied to sports betting and geopolitical conflict.

In the letter, Senators Adam Schiff, Catherine Cortez Masto, Richard Blumenthal, and Amy Klobuchar criticized Mr. Selig’s "stark reversal" from his confirmation testimony. While Mr. Selig previously testified that he would approach sports betting contracts with a "blank slate" and defer to the judicial system, the lawmakers noted he has since withdrawn guidance cautioning against such contracts and signaled plans to intervene in pending litigation. They argued that this approach attempts to "steer the Commission in a direction that is at odds with the intent of the Commodity Exchange Act," effectively converting clear statutory prohibitions into discretionary policy judgments.

The Senators also warned that current prediction markets are already offering contracts that "mirror sportsbook wagers" and bets on war, which evade state consumer protections. They emphasized that Congress explicitly deemed these activities contrary to the public interest and that the Commission cannot overwrite federal law through litigation strategy. The Senators called on the CFTC to abstain from intervening in lawsuits involving prohibited event contracts, to engage immediately with tribal communities, and to ensure that any future rulemaking strictly reaffirms that contracts involving gaming, war, terrorism, or assassination remain banned.

The Senators asked the CFTC for a prompt response and a commitment to realign the agency's actions with congressional statutes.