Amicus Brief Signals A More Aggressive Federal Stance

The Commodity Futures Trading Commission has moved to defend its jurisdiction over prediction markets, filing an amicus brief in a federal case to argue that event contracts are derivatives regulated by the Commission. CFTC Chair Michael Selig said the agency is stepping in after what he described as a growing wave of state actions targeting prediction platforms.

Nevada Fight Becomes The Test Case

The intervention comes as Nevada seeks to block prediction-market offerings tied to sports outcomes, arguing they constitute unlicensed wagering that must comply with state gaming rules. The dispute has turned into a broader jurisdictional battle: states say they have the power to restrict gambling, while the CFTC argues that event contracts fall under its exclusive federal mandate. 

Selig Says Event Contracts Serve Economic Functions

In a Wall Street Journal op-ed republished by the CFTC, Selig argued that event contracts can be used for hedging and price discovery, and that CFTC-registered venues are subject to federal supervision. He also cited nearly 50 active legal cases involving prediction markets as evidence that state action is expanding rapidly and needs a federal response. 

States Push Back And Call The Products Gambling

State officials counter that many of the most popular contracts look indistinguishable from sportsbooks. Utah Governor Spencer Cox publicly criticized the CFTC’s stance, calling prediction markets “gambling” and pledging to fight the agency in court.

Popularity Surge Raises The Stakes

The timing is not accidental. Prediction markets have gained mainstream attention as platforms broaden beyond politics into entertainment and sports. Kalshi said Super Bowl-related trading topped $1 billion in volume, a sharp year-over-year increase that has drawn more scrutiny from state regulators and traditional gaming interests. 

What Comes Next

With the CFTC now formally backing platforms in court, judges may be forced to answer a high-impact question: whether event contracts are primarily federally regulated derivatives or state-regulated gambling. The outcome could determine whether prediction markets scale nationwide under one rulebook or face a patchwork of state-by-state restrictions.