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The new chairperson of the Commodity Futures Trading Commission (CFTC), Michael Selig, made it abundantly clear that he is going to back the right of prediction markets like Kalshi and Polymarket to do business in all 50 US states.
“The CFTC will no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction over these markets by seeking to establish statewide prohibitions on these exciting products," Selig vowed during an appearance on CNBC in recent days.
Selig says that "when you get into derivative instruments" like those offered by prediction markets, "when there is a commodity involved, we have authority to regulate that."
Kalshi and Polymarket are both licensed federally under the CFTC, each claiming they do not offer gambling. They differentiate their products by pointing out that there is no middleman such as a bookmaker and there is no "house" taking a cut. Instead, individuals buy and sell contracts based on the outcome of future events. Market forces, not oddsmakers, set the price.
States, through their own regulatory bodies, have licensed gambling companies while setting up their own tax structures since the United States Supreme Court abolished prior prohibitions against sports wagering known as Professional and Amateur Sports Protection Act of 1992, or PASPA.
States actively clamping down on prediction markets include Massachusetts, Nevada, Connecticut, Michigan, Illinois — through lawsuits or enforcement actions. New York, Iowa, Hawaii, Ohio, Pennsylvania are among those reviewing potential legislative responses. Massachusetts was specifically cited during the CNBC sit-down.
Gaming attorney Daniel Wallach tweeted that Selig recently appeared on CNBC to say that the CFTC's jurisdiction over prediction markets is "extraordinary broad" because Congress excluded only “onions" and “motion picture box office receipts" from the definition of “commodity."
Wallach notes that the federal judiciary disagrees, while citing See CFTC v. TMTE.
Mike Selig recently said on @CNBC that the CFTC's jurisdiction over prediction markets is "extraordinary broad" because Congress excluded only “onions" and “motion picture box office receipts" from the definition of “commodity." The federal judiciary disagrees. See CFTC v. TMTE. pic.twitter.com/Ggt1IeLWRP
— Daniel Wallach (@WALLACHLEGAL) February 16, 2026
Wallach cites the filing further:
"The CFTC hangs its hat on 'all other goods and articles ... in which contracts for future delivery are presently or in the future dealt in.' But as the Supreme Court famously explained, 'Congress ... does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholes.' Rather, we must read all other goods and articles in its context, which is a lengthy, enumerated list of predominantly agricultural items—with onions getting very special treatment.
"When the terms of an enumerated list 'all belong to an obvious and readily identifiable genus, one presumes that the speaker or writer has that category in mind for the entire passage.' This principle is the ejusdem generis canon of interpretation. It constrains the scope of catchall terms tacked onto enumerated lists to the general category of the listed items. Noscitur a sociis, or the associated-words canon, can also be of use. It instructs that 'words grouped in a list should be given related meanings.' For example, when the Sarbanes-Oxley Act provided a penalty for anyone who 'alters, destroys, mutilates, or conceals a record, document, or other object,' the Supreme Court applied these canons to say other object did not include a fish."
"Section 1(a)(9)'s list has a clear common denominator: it names twenty-five agricultural goods (thirty if you count its further enumeration of fats and oils) from wheat and barley to wool and livestock. The Court is familiar with farms and gold mines but not a gold farm. The only outlier is motion picture box office receipts, which Congress added as an express carveout in 2010. So section 1 does not encompass precious metals as commodities because they are neither agricultural products nor movie tickets."
- Chris Costigan, Gambling911.com Publisher
