CFTC Chair Selig Signals New Strength on Prediction Markets After Industry Commentary Calls for Backbone

In a development that underscores the accelerating evolution of financial innovation policy, Commodity Futures Trading Commission Chairman Michael S. Selig has publicly articulated a significant shift in the agency’s posture on prediction markets — just days after industry commentary highlighted expectations for decisive leadership.

In the January 27 Bloomberg Law article “Crypto, Prediction Market Chiefs Gain Sway as CFTC Advisers,” I was quoted observing that “everyone is looking to Selig to provide backbone here.” That characterization was offered in the context of market participants and legal advisors awaiting clarity on the CFTC’s approach to emerging event contracts, especially those offered by platforms like Kalshi and Polymarket.

Less than 72 hours later, Chairman Selig made clear that the CFTC is moving beyond uncertainty toward an active regulatory role. According to multiple news reports, Selig directed CFTC staff to:

• Withdraw a 2024 staff advisory and proposed rule that would have restricted sports and political event contracts under the Commodity Exchange Act, a move that removes prior cautionary guidance and prevents its use as a shield for state action against federally regulated platforms; and

• Initiate a formal rulemaking process to provide clear federal standards for prediction markets or “event contracts,” a market structure that has grown rapidly but lacked tailored regulatory guardrails.

Chairman Selig also signaled that the Commission is prepared to defend its exclusive jurisdiction over event contracts in federal litigation, underscoring both the CFTC’s statutory mandate and its willingness to assert that mandate against competing claims by states or other actors.

These remarks came amid a broader industry debate over the boundaries of federal authority, state gambling regulation, and the proper role of the derivatives regulator in overseeing new market forms. Selig’s comments — emerging immediately after industry calls for leadership — suggest a heightened focus by the CFTC on delivering clarity, consistency, and institutional support for lawful innovation in prediction markets.

For market participants, legal advisors, and policymakers alike, these developments signal a material shift: federal regulators are not only listening to industry concerns, they are acting on them with concrete direction and regulatory intent.

That’s all for now,

Braeden

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About the author

K. Braeden Anderson is a Partner at Gesmer Updegrove LLP, where he leads the firm’s Securities Enforcement & Investigations practice, and chairs Mackrell International’s Blockchain & Digital Assets Group and Securities Enforcement & Investigations Group. He is a nationally recognized securities regulatory and enforcement attorney whose practice sits at the intersection of traditional financial regulation and emerging technology. He has been recognized in Best Lawyers: Ones to Watch® in America (2025) for Financial Services Regulation Law and Securities Regulation, and was named the #1 most-read fintech thought leader in the United States in Mondaq’s Spring 2025 Thought Leadership Awards.

Before joining Gesmer Updegrove, Braeden founded a Washington, D.C.–based law firm. He previously served as Assistant General Counsel at Robinhood Markets, Inc. (NASDAQ: HOOD), advising on high-stakes regulatory and enforcement matters, and earlier practiced at Kirkland & Ellis LLP and Sidley Austin LLP in New York and Washington, D.C.

Braeden is a prominent voice in securities and crypto regulation and a leading example of how lawyers can build brand through education and content. He publishes a weekly newsletter reaching more than 20,000 legal and financial professionals, runs a YouTube channel with over 160,000 subscribers, and regularly produces written and multimedia thought leadership through his blog, Anderson Insights. His work focuses on enforcement trends, fintech regulation, and the evolving role of digital assets in capital markets.