According to official statements, the U.S. Commodity Futures Trading Commission is the only agency in the country that oversees prediction markets. The government claims that event contracts are commodity derivatives that fall within its purview and not state gaming laws in a recent court filing and public remarks.
The CFTC submitted an amicus brief to the U.S. Court of Appeals for the Ninth Circuit on February 17, 2026. The brief concerns a dispute in which Crypto.com and the North American Derivatives Exchange contest Nevada’s attempts to classify specific event contracts as unlawful gambling.
Chairman Michael Selig says CFTC‑registered exchanges have faced an “onslaught of lawsuits” from states trying to restrict access to event contracts. He argues that these state actions ignore decades of law that grant the CFTC “exclusive jurisdiction” over commodity derivatives, including prediction markets.
Why the CFTC Says Prediction Markets Are Its Job
The brief explains that event contracts function like other derivatives because they allow businesses and individuals to hedge risks tied to future events. Examples include elections, economic data releases, weather, and sports, all of which can affect portfolios and operating results.
Under the Commodity Exchange Act, the CFTC oversees swaps and futures on commodities, a category that the agency says includes these event contracts. Selig stresses that courts and Congress have repeatedly affirmed this role and that letting states impose separate regimes would destabilize these markets.
Tension with States and Lawmakers
Several states, including Nevada, have tried to apply gambling rules to prediction markets, arguing that some contracts mimic sports bets or wagers on war and crime. A group of U.S. Senators recently asked the CFTC to avoid intervening in such cases and to let courts and state regulators handle them.
Selig responded in a Wall Street Journal op‑ed and follow‑up remarks, saying the agency will “no longer sit idly by” while states attempt to undermine its jurisdiction. He adds that event contracts “perform valid economic roles” and should be evaluated as derivatives under federal law, not as gambling products.
The CFTC’s move signals stronger federal backing for CFTC‑registered venues that list event contracts, including some crypto‑linked platforms. If courts agree with the agency’s arguments, state attempts to ban or separately license federal prediction markets could face steep legal hurdles.
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