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 in a recent court filing and public remarks that event contracts are commodity derivatives and fall within its purview, not under state gaming laws.
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 challenge Nevada’s efforts to classify certain 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, allowing 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 allowing states to impose separate regimes would destabilize these markets.
Tension with States and Lawmakers
Several states, including Nevada, have sought to apply gambling regulations to prediction markets, arguing that some contracts resemble sports wagers or bets on war and crime. A group of U.S. Senators recently asked the CFTC to refrain from intervening in such cases and to allow courts and state regulators to 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.
READ MORE: Here’s Why the Top Reasons the Pi Network Coin Price is Soaring
