CFTC Chair Warns States: ‘We Will See You in Court’

U.S. Commodity Futures Trading Commission Chairman Mike Selig issued a direct warning to state governments challenging federal authority over prediction markets. The declaration sets up a major jurisdictional battle over platforms like Polymarket and Kalshi.

I have some big news to announce… pic.twitter.com/3OBNTaOnIL

— Mike Selig (@ChairmanSelig) February 17, 2026

“To those who seek to challenge our authority in this space, let me be clear, we will see you in court,” Selig stated in a Tuesday video on X. He confirmed the agency filed a legal brief asserting federal jurisdiction over derivative markets.

Selig argued the CFTC has regulated these markets for over two decades. He said they provide useful functions by allowing Americans to hedge commercial risks like temperature changes and energy price spikes.

The chairman also claimed prediction markets serve as an important check on news media and information streams. However, he notably avoided mentioning sports betting in his examples.

Trump Administration Reverses CFTC Position

The current federal stance marks a dramatic reversal from pre-Trump CFTC policy. Previously, the agency fought against prediction market companies, claiming political bets were unlawful and contrary to public interest.

Courts ruled against the CFTC in its legal battle with Kalshi. When the Trump administration overhauled agency leadership, the fight was abandoned entirely.

Don Trump Jr. joined Kalshi as a strategic adviser in early 2025. In August, he joined Polymarket’s advisory board. Trump Media & Technology Group announced in October it was entering the prediction markets business.

Sports betting remains the central focus of ongoing legal disputes between states and prediction market platforms. Nevada, Massachusetts, and New York have accused event-contract platforms of violating state-level sports-betting laws.

A federal judge in Nevada ruled in November that state authorities were correct. The judge concluded these contracts fall outside CFTC jurisdiction. That ruling is currently under appeal.

Utah Governor Spencer Cox responded to Selig’s statement within hours with his own challenge on X. He questioned whether the CFTC has authority over “LeBron James rebounds.”

“These prediction markets you are breathlessly defending are gambling — pure and simple,” Cox wrote. He added they are “destroying the lives of families and countless Americans, especially young men.”

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. These prediction markets you are breathlessly defending are gambling—pure and simple. They are destroying the lives… https://t.co/Ohup2x3D8u

— Governor Cox (@GovCox) February 17, 2026

Cox advised Selig that Utah would use every power available to “beat you in court.” Meanwhile, Utah lawmakers are advancing legislation targeting certain sports contracts.

Following his Senate confirmation, Selig said the agency was resetting its prediction markets approach. He promised new rulemaking “grounded in a rational and coherent interpretation of the Commodity Exchange Act.”

The jurisdictional battle will likely require court resolution. Multiple appeals and lawsuits are now pending across federal and state courts nationwide.

Coinbase Enters the Legal Battle

Coinbase, the largest U.S. crypto exchange, filed lawsuits in Connecticut, Illinois, and Michigan on December 19. The company challenged those states’ attempts to regulate prediction markets under gaming laws.

Chief Legal Officer Paul Grewal wrote on X that the lawsuits aim to confirm prediction markets fall under CFTC jurisdiction. State gaming regulators have attempted to block such services by classifying them as gambling.

Today @coinbase filed lawsuits in CT, MI, and IL to confirm what is clear: prediction markets fall squarely under the jurisdiction of the @CFTC, not any individual state gaming regulator (let alone 50). State efforts to control or outright block these markets stifle innovation…

— paulgrewal.eth (@iampaulgrewal) December 19, 2025

“Prediction markets are fundamentally different from sportsbooks,” Grewal stated. He explained casinos win only when customers lose, while prediction markets are neutral exchanges matching buyers and sellers.

Coinbase announced plans to incorporate prediction markets through integration with Kalshi. The company’s Illinois filing stated it seeks to prevent “unlawfully applying Illinois gambling laws to federally regulated transactions.”