U.S. Commodity Futures Trading Commission (CFTC) Chairman Mike Selig said the agency is in talks with all major U.S. professional sports leagues as federal regulators deepen their oversight of sports-related prediction markets.
Selig told FINRA’s annual conference in Washington, D.C., on Tuesday that the regulator is seeking broader cooperation with the league to monitor insider trading and market manipulation related to tournament contracts. The CFTC previously announced a data-sharing agreement with Major League Baseball in March.
“We have signed a memorandum of understanding with Major League Baseball and are in talks with all professional sports leagues,” Selig said at an event hosted by the Agency’s Self-Regulatory Organization.
The CFTC’s agreement with baseball is its first formal information-sharing agreement with a professional sports organization. The arrangement comes as federally regulated prediction markets such as Kalshi and Polymarket are making deeper inroads into sports contracts, sparking disputes with state gambling regulators over who controls the industry.
Selig has taken an aggressive stance in the legal battle. He said the CFTC has sued “about five or six states” accusing it of trying to block contracts for federally regulated activities, and pledged that the agency would continue to litigate states that challenge the commission’s authority. He repeatedly argued that under U.S. law, derivatives listed on exchanges regulated by the Commodity Futures Trading Commission are subject to federal regulation, not state gaming laws.
“Different product, parallel system,” he said, comparing sports prediction contracts to traditional casino betting.
The chairman also outlined how the agency deals with insider trading in prediction markets, an area regulators have only recently begun to confront.
Selig cited a case overseen by Kalshi Platform involving YouTube creator MrBeast, in which an employee allegedly traded on market-moving information related to the publication of online content. He also described hypothetical sports-related scenarios involving coaches or team staff making trades based on non-public injury information before a game.
Exchanges themselves remain the “first line of defense,” Selig said, as they conduct know-your-customer and anti-money laundering checks that can help identify suspicious activity.
The CFTC also expects prediction markets to expand into mainstream investment products.
Selig said regulators are reviewing exchange-traded products and funds related to prediction market strategies and coordinating supervision with the U.S. Securities and Exchange Commission (SEC). SEC Chairman Paul Atkins is scheduled to speak at the conference later this afternoon.
Selig’s comments mark a broader shift at the U.S. Commodity Futures Trading Commission (CFTC) under the Trump administration, which has embraced prediction markets and cryptocurrency-related financial products after years of regulatory resistance to the industry.