CFTC Asserts Federal Oversight of Prediction Markets Amid State Challenges
The Commodity Futures Trading Commission (CFTC) moved decisively on February 19, 2026, to cement federal jurisdiction over U.S. prediction markets. Chair Mike Selig directed agency lawyers to file court arguments affirming federal oversight, countering state-level legal actions against event-contract platforms like Polymarket and Kalshi.
Selig emphasized that prediction markets fall under federal derivatives regulation, not state control. The CFTC has monitored these markets for decades, framing them as risk-management tools for weather and energy price fluctuations. New rulemaking is planned to clarify contract standards and encourage responsible innovation.
Legal battles center on whether certain contracts resemble prohibited sports betting. A Nevada federal judge initially sided with state authorities, but appeals continue as the CFTC pushes for jurisdictional primacy.
