CFTC Chairman Mike Selig’s reaction to Utah’s criminal enforcement against Kalshi and its co-founders continued over the weekend. During a Friday interview with CNBC, Selig suggested that Utah’s aggressive stance against prediction markets threatens executives of the NYSE and the Chicago Mercantile Exchange (CME).
“Virtually every major exchange has sports products,” stated the former SEC Crypto Task Force chief counsel on Friday. “Whether you’re the New York Stock Exchange with exchange-traded products that have, you know, sports underlying contracts or other products in them, or you’re the CME with futures based on sports index products.”
During the segment, Selig pointed out that statewide jurisdiction over event contracts takes away from the “federal uniform system” offered by the CFTC, which can provide consistent rules and guidelines for prediction platforms. However, the X post uploaded by the chairman concluded with the suggestion that Utah’s enforcement “is a threat to every major CEO.” Selig’s statements insinuated that NYSE President Lynn Martin and CME chief executive Terry Duffy could eventually face state-sponsored criminal prosecution due to the sports-based equities and index products their respective exchanges offer.
With polls scheduled to open across the country in less than 24 hours, the 2026 midterm elections loom large over prediction market regulation and potential congressional action. Precisely how the election results will impact prediction markets is a topic that both CFTC Chairman Mike Selig and Indian Gaming Association (IGA) Conference Chair Victor Rocha have recently chimed in on.
The CFTC’s mission “transcends party lines,” Chairman Selig told social media followers on October 26th.
“Kalshi will lose sports betting,” IGA Conference Chair Victor Rocha has insisted since federally regulated prediction markets exploded onto the national scene in 2025.
Although the traditional line of analysis has revolved around Republicans being “good” for prediction markets and Democrats being “bad” for the industry, Utah’s actions (as a historically “ruby red” Republican stronghold) are challenging such assumptions. It is also worth noting that Texas Senator Ted Cruz explicitly labeled sports contracts as “sports bets” during a May 2026 Senate Commerce Committee hearing on prediction markets.
The CFTC chairman’s observations that prediction market platforms require a “federal uniform system” to realize their potential align with the reality that Kalshi and other apps are facing. Even if North Carolina’s 6% state tax on prediction market fees goes into effect as scheduled on January 1st, a multitude of other states have already proven that they won’t be so “friendly” toward prediction markets.
That leaves Kalshi and other CFTC-regulated exchanges in a position where they will eventually require a favorable Supreme Court ruling (or an act of Congress) to ultimately thwart all state and tribal attempts to curtail their activities.
And regardless of which party gains or retains political power as a result of the midterms, a pathway to formal congressional approval for prediction market platforms seems extremely unlikely.
“Hedging” may indeed represent a sturdy backbone for regional or niche non-sports markets. Yet federal preemption and market prosperity may still be the best legal arguments for why CFTC-regulated sports contracts should exist at all. That perception is unlikely to change even if or when one state decides to break from the existing coalition and settle with prediction exchanges.
Loading …
