Does the CFTC’s opinion on prediction markets even matter?
As the federal and state court cases pile up around prediction markets and the Commodity Futures Trading Commission (CFTC) takes a lenient stance towards the vertical, where is this all heading?
The answer is likely that it is heading to the Supreme Court, and a firm resolution may still be some way away. But the way in which the CFTC has changed its position on event contracts has left many observers scratching their heads. Count International Masters of Gaming Law (IMGL) President and Jones Walker Partner Marc Dunbar and his IMGL colleagues among that group.
“It dominates all of our conversations,” Dunbar said on a March 4 episode of SBC Media’s iGaming Daily podcast. “We at IMGL are trying to make sense of this and interpret U.S. statutes and U.S. cases across the country to advise clients on what they should be doing, but we are very much scratching our heads.”
Dunbar recounted how, under the previous administration, the CFTC “essentially viewed prediction markets as the anathema of wagering” and made concerted efforts to push operators out of the U.S. Things have changed fast.
‘A complete change in personality’ at the CFTC
CFTC Chair Mike Selig appeared in front of a Senate committee at his confirmation hearing in November and suggested that he would remain on the sidelines. Within three months of those comments, Selig led the CFTC into its first court intervention by filing an amicus brief in Crypto.com’s case in Nevada.
“If I were a parent and Mike Selig and the CFTC were a child, I would have them back in front of the psychologist asking them to reevaluate the medication that they put them on,” Dunbar said. “Because you have a complete change in personality that has occurred …
“For him to jump in the deep end with a giant cannonball and splash all the unsuspecting sunbathers with ‘not only are we going to get in [court], we’re going to now become an advocate in favor of these platforms,’ really has everybody wondering what in the world is going on in the federal government. Did he lie to the U.S. Senate?”
The CFTC under Selig has so far backed up what the likes of Crypto.com, Kalshi and Polymarket have maintained in courts across the country: Event contracts, even those that closely resemble sports betting, are under the exclusive jurisdiction of the CFTC through the Commodity Exchange Act.
But so far, court judges’ opinions have been mixed. More than a year after sports prediction markets went mainstream, the issue remains utterly unresolved.
“At the end of the day, the CFTC’s opinion is as valuable as mine,” added Dunbar. “It doesn’t matter at all. When it gets up to the Supreme Court, the Supreme Court is gonna look at the creation statute of the CFTC and it isn’t going to care what Selig’s opinion is, or the opinion of the Biden administration or the Trump administration, frankly.”
Tune out the noise, we’re going to the Supreme Court
Dunbar and SBC team recorded the podcast episode on the day that Kalshi preemptively sued Utah in federal court, citing public comments made by senior state officials that it took as a threat of imminent enforcement action. Since then, plenty has happened. Kalshi and Polymarket’s cases in Nevada have been kept in state court, Michigan’s Attorney General sued Kalshi in state court and Polymarket immediately responded by suing Michigan in federal court.
The wave of fresh lawsuits and litigation developments is never-ending. How much attention do we really need to be paying? “What you need to focus on is how it’s going to go to the Supreme Court,” Dunbar posited.
“Nobody in the US Supreme Court is gonna care what any of these judges say, at the end of the day,” he added. “It’s going to be argued de novo in front of the Supreme Court and it is going to have far-reaching implications that have nothing to do with gambling and have everything to do with how a federal regulator can step in and essentially stomp on states’ rights to determine what is legal or illegal as it relates to vices within their community.”
On a previous episode of iGaming Daily last summer, Dunbar suggested that the early court cases involving Kalshi could rumble on for another two years. Where does he stand on that timeline now, seven months and several lawsuits later?
“Someone in these appellate circuits has to put their foot on the gas, or I don’t think it’s going to make it into [the Supreme Court in] 2027,” he forecasted. “I think we’re pushing into 2028.”
https://sbcamericas.com/2026/03/05/prediction-markets-igaming-daily-dunbar/