An industry-beloved financial regulator appointed by President Donald Trump is declaring war on states’ ability to regulate a growing class of gambling companies — and even Republican state officials are pushing back.
The issue concerns so-called prediction markets, which allow people to “trade futures” on the probability of various events occurring. The overwhelming bulk of their trading volume involves sporting events. These companies, like Polymarket and Kalshi, have effectively made online sports betting legal on a level not seen in decades, while Trump’s family has struck up financial partnerships with them. Lawsuits accuse prediction markets of illegal and predatory practices behind the scenes.
Enter Mike Selig, Trump’s chair of the Commodity Futures Trading Commission, a famously lax regulator that businesses prefer to deal with over the stricter Securities and Exchange Commission.
Selig posted a video on Tuesday announcing his agency is filing in court to assert sole jurisdiction over prediction markets, pre-empting local state laws that have attempted to rein in these companies.
“Over the past year, prediction markets have been hit with an onslaught of state-led litigation,” he said. “In response, the CFTC has today filed a friend of the court brief to defend its exclusive jurisdiction over these derivative markets.”
This was met with outrage — and not just from Democrats. Multiple current and former Republican governors slammed the announcement, saying it was a threat to states’ ability to keep their residents safe.
“Mike, I appreciate you attempting this with a straight face, but I don’t remember the CFTC having authority over the ‘derivative market’ of LeBron James rebounds,” wrote Gov. Spencer Cox (R-UT). “These prediction markets you are breathlessly defending are gambling — pure and simple. They are destroying the lives of families and countless Americans, especially young men. They have no place in Utah. Let me be clear, I will use every resource within my disposal as governor of the sovereign state of Utah, and under the Constitution of the United States to beat you in court.”
“Violating the rights of states who have been regulating sports betting and the rights of the states who oppose sports betting is not the purview of another alphabet soup federal agency. That’s what you’re doing,” wrote former Gov. Chris Christie (R-NJ), who is advising a prominent gambling industry trade group that opposes prediction markets as an unregulated competitor. “Yes I am standing up for the rights of all 50 states. Proud of it.”
(Editor’s note: The author of this article also works for a gaming company.)
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