CFTC Chairman Wants To ‘Future-Proof’ Prediction Markets
Financial Market Regulation

CFTC Chairman Wants To ‘Future-Proof’ Prediction Markets

January 23, 2026
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The new Commodity Futures Trading Commission chairman said he wants to help “future-proof” prediction markets, alongside other products under CFTC regulation.

Michael Selig penned an op-ed in The Washington Post that appears at the CFTC website as well. He also posted a thread on Twitter:

Here are the key bits from the article (emphasis added):

As new asset classes emerge and the CFTC’s role evolves, guidelines we establish should not just fit the product, but also serve a tailored regulatory purpose. Prediction markets have exploded in popularity as broad swaths of market participants seek to hedge portfolio risks and test their abilities to forecast truth.

On Twitter, Selig noted that “Markets shunned by the Biden administration are booming today” before talking about prediction markets. The CFTC under former President Joe Biden had been fighting the ability of prediction markets to offer election trading, before sports event contracts started booming in 2025.

And here’s Selig talking more broadly about the CFTC’s regulatory approach:

Arbitrary, cumbersome and opaque rules will not stand the test of time. The CFTC’s approach should be to deliver the minimum effective dose of regulation—nothing more and nothing less. This means an end to policymaking through enforcement. And this means the agency’s policymaking divisions will develop clear rules of the road for market participants that will be codified through notice-and-comment rulemaking to ensure that the regulatory requirements do not change wildly from administration to administration.

All of that taken together would seemingly mean prediction markets are in for a light and supportive touch from Selig:

  • Selig talks about prediction markets in some friendly language, saying they allow people to “hedge portfolio risks and test their abilities to forecast truth.” That’s language that’s almost straight out of the PR efforts from Kalshi, Robinhood, Coinbase and others.

  • Any changes affecting prediction markets are likely to come through formal rulemaking rather than near-term enforcement actions. Reading between the lines, that suggests concerns from members of Congress, the NCAA, and other interested groups are likely to fall on deaf ears.

    • Indeed, without rulemaking, there’s a chance a future Democratic administration would attempt to rein in prediction markets.

More analysis from Goodwin attorney Andrew Kim, who has been closely following the legal and regulatory issues around prediction markets, on Twitter:

More from Kim:

Notice-and-comment rulemaking — even to repeal existing rules to lower the “dose of regulation” to the “minimum effective” level — takes a lot of time. And I have to imagine that such rulemaking will be contentious, at least as to prediction markets.

There may be a lack of consensus on what the rules of the road should be. And I have to imagine the states/tribes/other gaming interests will oppose efforts to formally loosen restrictions on event contracts, cough Rule 40.11. Litigation may inevitably drag out the process.

At the end of the day, there’s only so much an agency can do to “future-proof” its policy prerogatives. And “future proofing” requires going through the tedium of the APA, and weathering litigation. I wonder if there’s enough time on the clock for all that to play out.

The CFTC has said precious little about an industry that has exploded over the past year under its laissez-faire approach. Selig’s direction here is an improvement for the CFTC; he is actually talking about prediction markets in public-facing statements rather than saying nothing at all.

What kind of rules of the road the CFTC will try to implement under Selig will be a major storyline as the industry develops in the coming years.

More from Selig on Fox Business here.

  • Kalshi cannot operate sports-prediction market in Massachusetts, judge rules (Reuters): “A Massachusetts judge ruled on Tuesday that prediction-markets operator Kalshi cannot let state residents bet on sports through its online platform, after the state’s attorney general accused it of running afoul of gaming regulators.”

    • “Suffolk County Superior Court Judge Christopher Barry-Smith in Boston said he will issue a preliminary injunction at the request of Massachusetts Attorney General Andrea Joy Campbell that would prohibit Kalshi from allowing users in the state to use its platform to place financial bets on the outcomes of sporting events without a license. …”

    • “The judge said he plans to finalize an injunction requiring the company to comply with the state’s sports wagering law going forward following a hearing on Friday, where he will also consider whether to pause his order to allow time for an appeal.”

    • Here’s the full decision and order.

    • More from Goodwin attorney Andrew Kim:

    • Here’s the Massachusetts attorney general’s office on the ruling:

      • “The Court has made clear that any company that wants to be in the sports gaming business in Massachusetts must play by our rules – no exceptions,” said AG Campbell. “Today’s victory marks a major step toward fortifying Massachusetts’ gambling laws and mitigating the significant public health consequences that come with unregulated gambling.”

      • In September, AG Campbell filed a lawsuit against Kalshi, alleging that the company uses an online “exchange” to offer sports wagering under the guise of “event contracts,” which allow bettors to place wagers connected to sports, such as the likelihood of a certain team winning a game or a certain player scoring a particular number of points. Kalshi’s platform offers “event contracts” on sporting events, including moneyline contracts, point spread contracts, and over-under contracts. These “event contracts” closely resemble sports wagers offered by licensed operators. The platform actively promotes its sports wagering offerings on television, social media, and online. Kalshi has neither applied for nor received a Massachusetts sports wagering license from the MGC, as required by law.

      • This matter is representative of AG Campbell’s ongoing efforts to combat the public health harms associated with sports betting and gambling, especially among young people. In June 2025, AG Campbell issued cease-and-desist letters to two online gaming operators for offering online gambling and betting products without obtaining a license. In March of 2024, AG Campbell announced the formation of the Youth Sports Betting Safety Coalition, a private-public partnership to raise awareness about the laws and risks surrounding youth online sports gambling.

  • Kalshi just launched 15-minute crypto markets:

  • Portugal orders Polymarket blocked after election bets surge before results announced (The Block): “Portugal’s gambling regulator has ordered crypto-based prediction market platform Polymarket to cease operations and be blocked in the country, deeming the platform illegal and pointing to a surge in election-related betting before official results were released.”

    • “According to Portuguese broadcaster Renascenca, the Portuguese Gaming Regulation and Inspection Service (SRIJ) gave Polymarket 48 hours to halt activity in Portugal, after determining that the platform is not authorized to offer betting services and that political betting is prohibited under national law.

      As of Monday, following the Jan. 16 notice, the site remained accessible, prompting regulators to move toward network-level blocking.”

  • DAZN partners with Polymarket (press release): DAZN, the leading global sports entertainment platform, has signed a deal with Polymarket, the world’s largest prediction market, to bring the excitement of prediction trading to its millions of users.

    • Prediction markets enable people to buy and sell contracts based on the outcomes of sports, cultural moments, and many other events. The partnership with Polymarket aims to give DAZN users the ability to engage with these markets directly within DAZN’s platform, adding an innovative new dimension to the way fans experience sport.

    • DAZN’s users around the world currently benefit from live and on-demand sports viewing, real-time scores, news, and FanZone – where they can interact with other sports fans. In an increasing number of markets, users can also enjoy sports betting through DAZN Bet on the best sporting events around the world, all in DAZN’s ecosystem.

    • The Polymarket partnership brings together two market leaders to enhance engagement for sports fans as events unfold. Following the agreement, DAZN will apply for the relevant CFTC licences and, subject to approval, intends to introduce predictions trading in the United States in the coming months. Other countries may follow, subject to local regulation.

    • In the near term, Polymarket data will be integrated into the live sports broadcast experience on DAZN. This will give sports fans instant visibility into shifting probabilities, helping them understand momentum, potential outcomes, and key moments in sporting fixtures in a brand new, dynamic, and data‑driven way.

    • Shayne Coplan, Founder and CEO of Polymarket, said: “Every sporting event is a conversation about what happens next. Polymarket turns that conversation into real-time probabilities, shaped by millions of users around the world. Through our first-of-its-kind partnership with DAZN, we’re embedding those insights directly into the viewing experience—from boxing to the Champions League—so fans can track momentum, debate outcomes, and engage with sports in a way that’s never existed before.”

    • Shay Segev, CEO of DAZN Group, said: “DAZN is laser-focused on bringing fans closer to the sports they love. Through our partnership with Polymarket – the world’s largest prediction market – we will offer another immersive and exciting way for fans to experience sport. Integrating prediction trading will be an excellent addition to our platform.”

  • WTF Is Going On: Prediction Market Losers, Part II (Wall Street and Main Substack): “But overall, for prediction markets to run billions of dollars in volume annually across literally thousands of markets, there needs to be a large pool of losing money. And, as we wrote last week, it’s not insane to predict (pardon the pun) that such a pool will exist. There are people happy to lose money in all sorts of gambling contests, and have been for literally thousands of years. It’s perfectly possible that the 2026 midterms garner interest in the same way as scratch-off lottery tickets and the Eagles minus three and a half.”

    • “Certainly, that’s the bet that the investors in these markets are making. They have already raised billions of dollars. U.S. online gambling giants DraftKings and FanDuel both are entering the market. The rise of these markets clearly has impacted those stocks as well: investors worry that prediction markets will be able to peel off some sports-related volume (since, for reasons that are not 100% clear, the Commodity and Futures Trading Commission is not enforcing a seemingly obvious, legislatively-enacted, ban of sports “event contracts”, as they’re now).”

    • “The problem is, however, that the more closely you consider that bet, the weaker it seems. There are multiple reasons why prediction markets look much more like a fad than an innovative way to bring information to society.”

  • Polymarket Traders See a 37% Chance of Greenland Tariffs by February (WSJ): “Prediction-market gamblers are betting on whether President Trump will follow through on his threat to impose 10% tariffs on European countries that have opposed his Greenland takeover. Trump threatened several European nations with the levies, which he said would start next month, and continue until a deal is struck for the U.S. to purchase Greenland. Traders on Polymarket, a popular crypto-based betting market, see a 37% possibility that the tariffs will hit at least one of the threatened countries on or before Feb. 1. Polymarket also offers a separate, less popular contract on whether the tariffs will hit all of these countries by Feb. 1. Traders assigned a 17% chance to that. Trading volumes for both contracts were relatively thin, below $150,000 as of Tuesday morning in New York.”

  • Kalshi traders see a 42% chance of a Greenland deal before Trump’s term ends (Fox Business): “Prediction markets are assigning rising odds to the idea that the United States could one day acquire part of Greenland, even as traders remain skeptical that anything happens in the near term. Kalshi traders put the odds at 13% by May 2026, rising to 27% before 2027 and 42% by the end of President Donald Trump’s term in 2029. The trading volume, or the total dollar amount wagered on this market, is a little more than $3.6 million.”

  • Can AI and Polymarket Handicap the Guild Awards Like Human Pundits? (Variety): “From HAL 9000 in ‘2001: A Space Odyssey’ (1968) to Skynet in the ‘Terminator’ films, AI has been portrayed as an existential threat to humankind in the movies. But when it comes to handicapping film awards races, AI and other cutting-edge tech are our friends. Gone are the days when pundits had to rely on time-consuming analysis of historical precedents and critical trends and spitball takes on showbiz community consensus to make their picks. Now, we have an array of free digital tools at our disposal, from chatbots to the crypto-powered prediction platform Polymarket, to do it for us. We’re going to set the machines loose on the four major guild awards — DGA, PGA, WGA and SAG (rebranded as the Actor Awards) — and have them separate the long shots from the sure things. Because space is limited, the analysis will be applied only to Oscar-eligible narrative features, calculated on the morning after the Golden Globe Awards, held on Jan. 11.”

  • Capturing unusual trades in prediction markets?

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