By Bill Alpert
Commodity Futures Trading Commission Chairman Michael Selig promised on Thursday that his agency would clarify its stance on how sports-related bets on the prediction market platforms Kalshi and Polymarket differ from the state-regulated gambles offered by DraftKings and Flutter's FanDuel.
Selig appeared jointly with U.S. Securities and Exchange Commission Chairman Paul Atkins in a presentation mostly aimed at showing that the agencies would harmonize their rules to promote cryptocurrency innovation and rationalize margin collateral requirements in securities markets.
But in his first speech as the head regulator of futures markets, Selig said that the CFTC would rectify the confusion left by its failure to issue clear rules for prediction markets, which the agency calls event contracts.
Kalshi and Polymarket didn't immediately respond to a request for comment. Polymarket has a data partnership with Dow Jones, the publisher of Barron's.
Online contracts on sports events have become big business for predictions markets. The contracts clobbered the stocks of state-licensed bookmakers last year. Their continuing popularity threatens billions in state gambling tax revenue and make online sports wagers available in states such as California and Texas, where they are still banned.
A Barron's article reported that these conflicts were exacerbated under the regime of Selig's predecessor, Acting Chair Caroline Pham, by the CFTC's refusal to issue rules on sports event contracts, or to intervene in lawsuits.
"That uncertainty hasn't served our markets well, nor has it served the public interest," said Selig on Thursday. "It is time for clear rules and a clear understanding that the CFTC supports lawful innovation in these markets."
State and tribal regulators have filed dozens of lawsuits in federal district and circuit courts, alleging that Kalshi and Polymarket violate state gambling laws, as well as the CFTC's own rules and governing laws -- which forbid financial contracts or swaps that refer to "gaming."
In court, Kalshi has said its sports offerings are financial swaps that are subject to the CFTC's sole jurisdiction. On its website, Polymarket describes itself as "a prediction market platform, not a gambling site."
Selig on Thursday laid out a program in which the agency would rescind its previous advisories on sports-related event contracts and then propose new rules for public comment.
"For too long, the CFTC's existing framework has proven difficult to apply and has failed our market participants," Selig said.
He also said the CFTC would consider intervening in some of the court disputes." Where jurisdictional questions are at issue," said Selig, "the Commission has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives."
Write to Bill Alpert at william.alpert@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 31, 2026 14:38 ET (19:38 GMT)
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