Congress Presses CFTC Chair on Sports Contracts, Insider Risk and Sole Commissioner

Lawmakers on the House Agriculture Committee questioned Commodity Futures Trading Commission chairman Mike Selig throughout a listening to on Thursday, as scrutiny of prediction markets continues to accentuate. The listening to was held within the Agriculture Committee as a consequence of its oversight duties associated to the CFTC.

In ready testimony, Selig leaned closely on enforcement, signaling the CFTC intends to pursue fraud, manipulation and insider buying and selling throughout derivatives markets, together with exercise involving nonpublic authorities data getting used to tell buying and selling.

“I need to be crystal clear: to anybody who engages in fraud, manipulation, or insider buying and selling in any of our markets, we’ll discover you, and you’ll face the complete drive of the legislation,” Selig stated in his opening prepared remarks. “Nothing is extra vital than defending market integrity and that’s why I’ve been diligently working to reinvigorate our enforcement division and improve our surveillance instruments to satisfy the challenges of our rising markets.”

The listening to rapidly expanded past Selig’s preliminary testimony, with committee members from each events urgent Selig on matters like sports activities occasion contracts and whether or not federal oversight is permitting platforms to bypass state gaming legal guidelines and tribal compacts. There had been additionally questions associated to the CFTC’s function in ongoing authorized battles with states over jurisdiction.

The lawmakers additionally requested questions on CFTC staffing and the 4 open commissioner roles, in addition to the company’s construction and decision-making, establishing broader debates over authority, enforcement and the long run regulatory framework for prediction markets.

WATCH: @ChairmanSelig confirms the @CFTC is a cop on the beat, and the company will proceed monitoring and defending markets to make sure they’re well-functioning. pic.twitter.com/9dololRDbk

— CFTC (@CFTC) April 16, 2026

Selig says exchanges, not CFTC, are first line of protection for insider buying and selling violations

Concerns about insider buying and selling drove lots of the exchanges in the course of the listening to, with lawmakers urgent Selig on whether or not prediction markets permit merchants to revenue from using nonpublic data. The line of questioning builds on latest congressional letters and proposed laws elevating related considerations, together with warnings that event-based markets tied to geopolitical developments could possibly be susceptible to misuse of delicate data.

Ranking committee member Rep. Angie Craig (D-Minn.) lately sent a letter to Selig asking that the CFTC “flow into government branch-wide steerage explaining that federal staff should chorus from insider buying and selling in prediction markets.” During the listening to, Craig requested Selig how the fee “engages to police these markets” in comparison with the self-regulatory function that prediction market platforms play. 

“The Commodity Exchange Act units forth a regulatory scheme the place the exchanges are the primary line of protection,” Selig stated. “They are self regulatory organizations, which signifies that they’ve quasi regulatory authority granted to them by the federal government.”

Selig described the CFTC because the “second line” of protection, saying that the company often evaluations and surveils platform exercise and every contract the exchanges self-certify. 

“So it’s a complete scheme the place we now have a number of ranges of evaluation of every contract and varied actions within the markets, and we’ll proceed to work along with the exchanges to be sure that the markets are effectively functioning,” Selig stated.

Craig pressed Selig on what number of self-certified contracts the CFTC has truly rejected. Selig stated he didn’t have an actual quantity, however that the company “often reject(s) contracts.” The chairman referenced the recent issuance of Advance Notice of Proposed Rulemaking (ANPR), which is in search of suggestions from stakeholders and most of the people about quite a few matters, together with which forms of contracts needs to be allowed. The suggestions will assist inform any new guidelines or laws the company adopts.

“Under the prior administration, there was a scarcity of readability on a number of these contracts, and the floodgates actually opened, and I inherited a number of these contracts once I took workplace simply over a 100 days in the past,” Selig defined. “So we’re actively reviewing what’s on the market. We’re ensuring there’s clear tips and steerage.”

Committee members query CFTC staffing ranges

Craig additionally questioned whether or not the CFTC had enough staffing to supervise “continued progress of conventional futures markets, the swaps markets, and rising digital belongings and prediction markets.” She stated that the CFTC presently has roughly 543 full time staff, which is down from 708 on the finish of fiscal 12 months 2024. Craig stated the company’s finances request solely seeks to fund a whole of 650 staff and requested whether or not the company might be efficient with these staffing ranges.

Selig stated that the fee was working higher than ever with its present staffing, however that they’re actively hiring. 

“I do imagine that we’re working extra effectively and successfully than ever earlier than, due to among the proper sizing of the federal government that’s occurred underneath this administration,” Selig stated. “We’re hiring very gifted individuals from the personal sector, in addition to expertise from all through the federal government. So we’ll proceed to construct up our employees. We … are actively on the lookout for people, however it’s completely vital that we now have the funding and sources to proceed to watch and surveil our markets.”

Selig stands as the one commissioner of the CFTC in the intervening time. The company is structured to incorporate 5 commissioners, with not more than three commissioners from anyone get together. Rep. Jim Costa (D-CA) stated he discovered it “inappropriate” that Selig is the only real commissioner with such vital questions in entrance of the company. 

“No one has decided that you simply’re Solomon-like, nor king,” Costa stated. “I feel it’s, uh, inappropriate to have one individual, as a lot as you’ll attempt to be attentive to creating these determinations, when the legislation was very clearly meant to be a bipartisan illustration.” 

Craig requested Selig whether or not he would decide to including commissioners on a bipatristan foundation. She additionally requested him to decide to not finalizing any new laws with him sitting as the one commissioner.  

“The president makes choices round nominations, and so I look ahead to working with whoever the president chooses to appoint,” Selig stated. “But within the interim, we can’t, for the sake of the American individuals, decelerate in our rulemaking. It’s crucial that we get investor protections, shopper protections, and safeguards for our markets. And so I can’t, sadly, decide to not do my job that I used to be appointed to do by the president.”

Lawmakers say sports activities occasion contract buying and selling cuts into state, tribal authority and income 

Members of the committee requested a number of questions associated to CFTC-regulated prediction market platforms providing sports activities occasion contracts, which has been on the heart of many authorized battles with states that argue that they’re basically unlawful sports activities betting that ought to fall underneath their oversight. 

Rep. Gabe Vasquez (D-NM) introduced out a board that includes two units of comparable betting strains for an MLB sport and requested Selig if he might differentiate between the 2. Selig stated he wasn’t an “professional on figuring out betting strains,” and requested the lawmaker to enlighten him. Vasquez then revealed that one set of betting strains was from a state-regulated sportsbook, whereas the opposite was from a federally-regulated prediction market platform. 

So, @RepGabeVasquez (D-NM) requested CFTC’s @ChairmanSelig to establish which one in all these bets was from a on line casino sportsbook and which was on a prediction market. Selig dodged, however stated “there are lots of dangers that could possibly be hedged” on prediction websites, differentiating it from playing. pic.twitter.com/WkExPnmiNy

— Marshall Cohen (@MarshallCohen) April 16, 2026

“Well, it’s clear to me that you may’t inform, and that’s the issue as a result of the typical shopper can also’t inform,” Vasquez stated, including that, whereas there isn’t a lot distinction, “they’re regulated fully in another way.”

Vasquez stated that gaming tribes in his district and playing regimes in different states have gone via intensive processes and negotiations for “gaming techniques with compacts, licensing, integrity guidelines, age verification, and shopper protections.”

“So when a federal company just like the CFTC permits prediction markets to bypass these established, longstanding authorized necessities, however underneath a special label, and makes use of loopholes to evade regulation and shopper safety requirements, it undermines tribal sovereignty and state safety,” Vasquez stated. “What this implies, in sensible phrases, is that tribal communities … are shedding out on important income to pay for his or her baby care, training, infrastructure, and the general effectively being of their group. Not truthful, proper?”

Selig stated that the underside line is that sports activities markets on prediction platforms “should be well-functioning and comprehensively regulated by the CFTC … our statute mandates it, and we’ll proceed to do it.”

Connecticut Representative pushes again on CFTC lawsuit

Rep. Jahana Hayes (D-CT) additionally dug into questions on sports activities occasion contracts, noting Selig’s feedback in an interview the place he stated, “It doesn’t matter if it’s on sports activities, politics or anything, if it’s a validly supplied product inside a CFTC-regulated change, then we regulate that.” 

Hayes additionally pointed to the latest CFTC lawsuits against Connecticut and other states in response to cease-and-desist letters despatched by state gaming regulators asking sure platforms to cease providing sports activities markets of their jurisdictions. 

“When the federal authorities steps in like this, it may possibly undercut the work that states are already pursuing to guard their residents,” Hayes stated. 

“Chairman Selig, would congressional readability on the roles and duties of states relating to prediction markets assist resolve this ongoing authorized dispute?” Hayes continued. “And are you keen to work with Congress in a bipartisan method to make clear that subject so it’s not a again and forth between the state and federal governments over this regulatory course of?”

Selig stated he appreciates considerations about states’ rights, however that the legislation is evident that the CFTC has unique regulatory authority in terms of buying and selling supplied on designated contract markets (DCM), the company’s designation of platforms like Kalshi and Polymarket US. “We will proceed to say ourselves in litigation to defend that proper,” he stated.

“It’s regarding because the chairman of the company when states attempt to nullify federal legislation,” Selig additionally advised Hayes. “So we’ll proceed to defend that legislation in courtroom, however, in fact, we’re joyful to debate coverage, and that’s why we now have a complicated discover of proposed rulemaking.”

Future of prediction markets stays unsettled

The listening to underscored how unsettled the regulatory future of prediction markets stays, with lawmakers, regulators and states nonetheless sharply divided on how the merchandise needs to be categorised and overseen.

While Selig maintained that the CFTC has clear authority over occasion contracts listed on federally regulated exchanges, members of Congress repeatedly raised considerations about insider buying and selling dangers, the enlargement of sports-related markets, and the company’s skill to supervise the sector amid staffing constraints and ongoing litigation with states.

With a number of congressional proposals into account and courts weighing jurisdictional disputes between federal regulators and state gaming authorities, the framework governing prediction markets is more likely to stay in flux within the months forward.

Watch Thursday’s full listening to beneath:

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