Democratic Senators pressed Mike Selig, President Trump’s nomination as the next head of the Commodity Future Trading Commission, about sports event contracts during a hearing before the Agriculture, Nutrition and Forestry Committee today.

Selig’s responses were consistent: As CFTC chair, he will rely on the courts to determine the legality of prediction markets offering products the majority of states and tribes contend are equivalent to sports wagers.

It’s an ostensibly different position than the one taken by Brian Quintenz, Trump’s original nomination to lead the agency, who told the Senate Ag Committee in June that he’d be obligated to defend prediction markets against legal challenges from states.

CTFC Regulations ‘Clearly Prohibit’ Sports Event Contracts

Sen. Tina Smith (D-MN) fired the first prediction markets question at Selig, saying while Minnesota has not legalized sports betting, her constituents “can bet on sports online, anytime they want to through the so-called prediction market platforms. As I’m sure you also know, through the Indian Gaming Regulatory Act, tribes have the authority to regulate gaming within their reservations, including sports betting. …

“Current CFTC regulations clearly prohibit event contracts related to gaming from being offered. So, if confirmed, can you commit to enforcing that prohibition?”

“I intend to always adhere to the law and follow what judicial decisions tell me to follow,” Selig said in a response that became predictable and repetitive.

“I also believe that these types of issues are ones that we can work through together. Some of them are congressional issues as to whether we change statutes in certain areas, but of course I was not at the CFTC at the time that this portion of the Dodd-Frank Act (which regulates swaps markets) was drafted. …

“These are just very challenging interpretive questions that I will look to the courts on.”

Do Prediction Markets Protect Against Manipulatable Markets?

Amid recent betting scandals in the NBA and MLB, Sen. Cory Booker explained Designated Contract Markets must comply with 23 CFTC core principles, including one that “requires contracts must not be readily susceptible to manipulation. …

“I wanna make sure that you have strong integrity in your monitoring systems in place,” Booker put to Selig.

Selig, again, invoked a reliance on courts.

“I think it’s vitally important that the CFTC look to the courts on a lot of these issues,” he told Booker. “They’re of course being litigated across the country. To the extent that any of these event contracts constitute gaming, that’s a question for the courts.

“But if they’re trading in our markets, if the products are self-certified and the CFTC is allowing them to trade in the markets, of course it’s vital that the CFTC ensure that those contracts are not being manipulated, that they’re not readily susceptible to manipulation.

“It’s a core principle, and of course if confirmed, that would be something that I would enforce.”

Schiff Questions Financial Utility of Sports Event Contracts

Sen. Adam Schiff, a Democrat from California, a state where tribal influence is particularly strong, summarized what some industry observers perceive as hypocrisy by companies like Kalshi and Polymarket.

“These prediction markets are trying, I think, to have it both ways simultaneously, marketing themselves as financial products and marketing themselves as sports betting,” Schiff said. “But there’s no economic utility to these contracts. There’s no price discovery being facilitated. They’re offering gaming products with no regulation, and I think that’s in violation of state law and tribal sovereignty. …

“I understand that you will defer to the courts,” Schiff anticipated Selig’s answer. “I would hope that you would defer to the courts and abide by court decisions, but what is your view on whether these are gaming in violation or these are some kind of different contractual obligation that has some kind of economic merit, intrinsic economic merit?”

“As you know as a good lawyer, the answer is always it depends, and that’s why these are questions for the courts,” Selig offered. “They’re really complicated issues of interpretation.”

Pressed to explain what constitutes a sports bet, Selig avoidance persisted.

“I think it would be irresponsible for me to prejudge that issue,” he said, “and so I will come into the issue at the commission if confirmed with a blank slate and look to the courts.”

Massachusetts has become the latest to state to warn sports betting licensees about getting too deep into the prediction markets business.

In a letter to operators, Massachusetts Gaming Commission executive director Dean Serpa writes, “Please accept this letter as notice that you are prohibited from offering sports-related event contracts in Massachusetts, directly or via an affiliate, related business entity, or other association, or directing patrons to such event contracts being offered in Massachusetts. …

“In the event you offer sports-related event contracts in Massachusetts or direct patrons to such event contracts being offered in Massachusetts, the Commission may take steps up to and including revocation of your license.”

Sportsbooks have been served similar notices in Ohio, Arizona, Michigan, Illinois and Nevada.

The relevance of the warnings has heightened over the last week, as DraftKings and FanDuel – by far the top two revenue-producing sportsbooks in the US – have unveiled plans to offer sports event contracts on new prediction markets platforms. These plans, though, are only for states where sports betting is not legal.

PrizePicks, which is licensed in Massachusetts as a DFS operator, also recently announced its prediction markets intentions via a new partnership with Polymarket.

Is Nevada First Domino?

While FanDuel and DraftKings maintain their sports event contracts will not be available in legal sports betting states, Massachusetts’ letter suggests regulatory sanctions in other states may carry over to the Commonwealth.

“To the extent any other regulator takes action against your license due to your operation in the prediction market space, such action may inform decisions related to your suitability in Massachusetts,” Serpa writes.

This portion of the warning is consistent with gaming attorney and lobbyist Bill Pascrell III telling DeFi Rate recently, “Once you get a license stripped in one state, it has a deleterious effect in other states.”

Nevada, in fact, has taken action against FanDuel and DraftKings, although neither operator is licensed as a mobile sportsbook in the Silver State. And it appears they won’t be any time soon.

In a notice to licensees dated yesterday, Wednesday, Nov. 12, the Nevada Gaming Control Board indicated FanDuel has surrendered its license as an information service provider and that DraftKings has withdrawn its application for a sports betting license.

FanDuel operates the retail sportsbook at the Fremont Hotel & Casino in Las Vegas. DraftKings opened a 90,000-square foot office in Vegas in March 2023.

Mass Fighting Prediction Markets on Multiple Fronts

Prediction markets are in Massachusetts’ crosshairs.

Multiple states, including New York, Nevada, New Jersey, Maryland, Ohio, Illinois, Montana and Arizona, have sent cease-and-desist letters to Kalshi, which in turn has sought preliminary injunctions to halt enforcement of the C&Ds. Massachusetts chose a different path by initiating a lawsuit against the company.

These states all make the same case, however: Kalshi is acting as an illegal sportsbook in their jurisdictions.

As DraftKings and FanDuel push further into prediction markets, they’re risking putting themselves in the same bucket.

Polymarket has relaunched in a limited beta in the U.S., announcing that it is letting a small number of American users trade contracts on outcomes for sports, politics, pop culture, and more.

Founder Shayne Coplan confirmed the news at Cantor Fitzgerald’s Crypto and AI Infrastructure Conference in Miami, calling the U.S. exchange “live and operational.” Bloomberg later reported that the company began onboarding select accounts as part of a compliance-monitored testing phase.

While only a sliver of users currently have access, the relaunch represents a pivotal moment for prediction markets in the U.S.

A Regulated Return After a Rocky Exit

Polymarket’s path back to the U.S. has been anything but smooth.

In 2022, the Commodity Futures Trading Commission (CFTC) fined the company $1.4 million for operating an unregistered event-based derivatives exchange. As part of the settlement, the platform shut off American access and moved operations offshore.

That could’ve been the end of the story. Instead, Polymarket spent the past two years restructuring and working toward a compliant re-entry. The CFTC later issued no-action relief, effectively allowing the company to restart operations through its regulated subsidiaries.

The company’s new architecture gives it the infrastructure to offer event contracts legally within U.S. borders. That means trades on outcomes like “Top Spotify Artist 2025” or “Who will Donald Trump pardon?” can now clear under an approved derivatives framework rather than the gray-area mechanics of offshore crypto markets.

It’s a subtle but significant distinction that could decide how prediction markets evolve in the U.S. over the next few years.

The Competitive Landscape Is Heating Up

Whenever Polymarket does launch (there’s a 94% chance it will happen this year, according to Polymarket), the U.S. prediction market space will look very different.

Kalshi has established a strong foothold as the CFTC’s flagship exchange for event contracts. FanDuel plans to roll out a federally compliant “Predictions” product this winter. DraftKings has confirmed it’s building something similar. Even Trump Media has entered the fray through a partnership with Crypto.com, launching “Truth Predict.”

ProphetX, a sports-first platform, filed for dual CFTC registration as both a Designated Contract Market and Derivatives Clearing Organization, a move that could let it operate nationwide.

By the time Polymarket fully reopens, it will be rejoining an ecosystem that has evolved rapidly. It is now a space where sports and politics are no longer separate verticals but converging pillars of the same prediction economy.

The Road Ahead

Polymarket’s current holdup appears to be a result of the federal government running out of money.

According to a Front Office Sports report, the platform’s long-awaited U.S. relaunch was effectively frozen by the federal shutdown, which began just one day after Polymarket filed its self-certification of event contracts with the CFTC on Sept. 30. The shutdown ended on Wednesday, but it could take some time before everything is operating normally again.

Still, Polymarket appears unfazed. While it rolls out its beta product for testing and approval, the company continues to market aggressively, touting partnerships with Google, Yahoo Finance, PrizePicks and the NHL, and reminding followers that it operates in more than 180 countries. The company’s waitlist still reads “coming soon,” but the debut could happen quickly once the CFTC clock restarts.

Kalshi has scored another win in its fight to define the future of sports prediction markets. 

On Monday, a California federal judge refused to block the platform’s contracts, siding with the company’s argument that it is a federally regulated exchange and not a sportsbook. The ruling hands tribes their first loss in a fast-expanding legal battle that could redraw the boundaries of gambling law.

Court Says CFTC, Not Tribes, Regulates Event Contracts

U.S. District Judge Jacqueline Scott Corley rejected a motion for a preliminary injunction from Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians. The tribes sought to block Kalshi from offering “sports event contracts” accessible from tribal lands, arguing that the operator’s activities violated the Indian Gaming Regulatory Act (IGRA) and constituted unlicensed Class III gaming.

Corley disagreed. In her 28-page order, she ruled that Kalshi’s operations fall under the Commodity Exchange Act (CEA) and the oversight of the Commodity Futures Trading Commission (CFTC).

“The UIGEA, unlike IGRA, expressly addresses internet gaming that can be accessed in locations where such gaming is unlawful, including Indian lands,” Corley wrote, referring to the Unlawful Internet Gambling Enforcement Act (UIGEA). Because Kalshi is registered with the CEA, its online contracts “are not bets or wagers under the UIGEA,” even if users trade them while on tribal property.

Judge Corley is also persuaded by Kalshi's argument that interstate (or in this case, state-to-Indian) gaming issues are governed by UIGEA, not IGRA, and UIGEA carves out trading activity governed by the CEA. pic.twitter.com/n7hdJx5aJw

— Andrew Kim (@akhoya87) November 10, 2025

Expanding Legal Battles

The ruling follows a string of federal victories for Kalshi, which has faced regulatory pressure from states including Maryland, Nevada, and New Jersey. In each case, judges have declined to halt its operations while litigation continues, citing the CFTC’s exclusive jurisdiction over federally registered exchanges.

Still, tribal governments remain central to the fight. Their lawsuits argue that prediction markets siphon revenue from tribal gaming and erode sovereign authority. Earlier this year, a similar challenge helped pause Crypto.com’s event-contract offerings in Nevada.

Judge Acknowledges Tribal Concerns

Corley acknowledged those sovereignty concerns but said they weren’t grounds for a preliminary injunction.

“By self-certifying the legality of its event contracts in a way that insulates its activities from judicial review,” she wrote, “Kalshi may have found a way around prohibitions on interstate gambling that were created with the Tribes’ best interest in mind.”

What the Decision Means for Prediction Markets

While the order is limited to preliminary relief, it reinforces the federal footing Kalshi and similar firms rely on. The court’s reasoning effectively affirms that CFTC-regulated exchanges sit outside state and tribal gambling frameworks, at least for now.

That interpretation narrows the reach of IGRA and state gaming laws in the online prediction-market space, underscoring the jurisdictional gap between traditional gambling regulation and federally registered financial exchanges.

Industry observers say the decision could encourage other platforms to expand their offerings while awaiting further federal guidance.

At the same time, the ruling heightens pressure on the CFTC, which has yet to issue clear rules around sports-based or election-based event contracts. Congress and federal agencies may now face renewed calls to clarify where prediction markets end and gambling begins.

For tribes, the legal route has narrowed but not closed. Their best leverage may now shift from courtroom litigation to legislative advocacy, pushing for clearer boundaries between financial contracts and games of chance.

Ultimately, Corley’s order keeps Kalshi trading, keeps tribes frustrated, and keeps the federal government in charge — at least until the Ninth Circuit or the CFTC decides otherwise.

Recent insights suggest that US Vice President Kamala Harris might continue the current administration’s hardheaded approach toward crypto. 

Her choice of advisors, as identified in a recent Bloomberg BusinessWeek article, include Brian Deese and Bharat Ramamurti – both of whom have played pivotal roles in the Biden administration’s not-so-friendly crypto policies. 

These insights were shared by Alex Thorn, Head of Research at Galaxy Digital, in a series of posts on X:

Key Figures and Their Influence

Brian Deese and Bharat Ramamurti have been instrumental in shaping President Biden’s economic strategies, particularly those that impact the crypto industry. 

Deese, a key advisor at the White House, notably authored a blog titled “The Administration’s Roadmap to Mitigating Cryptocurrency’s Risks,” published in January 2023. While the blog claimed to support innovation, it largely focused on viewing crypto from the perspective of a need for fraud prevention and risk mitigation. 

Thorn insightfully noted that on the same day Deese’s blog was published, the Federal Reserve rejected Custodia Bank’s applications for membership and a master account, and extended bank restrictions on crypto activities to all members. 

This decision was part of a broader move to restrict certain crypto-related financial activities, known as “Chokepoint 2.0.”

The very next week, Democrat senator Dick Durbin took the senate floor to trash crypto in an aggressive speech, calling it “the latest scam to rip off millions of hard working Americans to the tune of billions of dollars.”

Thorn also highlighted Bharat Ramamurti’s role, describing him as “the White House’s top crypto critic,” citing a description from Fortune. 

Ramamurti, who worked under Deese at the National Economic Council, has extensive experience working with Senator Elizabeth Warren, a notable critic of the crypto industry. Thorn mentioned that Ramamurti was involved in blocking a compromise on stablecoin legislation in July 2023, which would have legalized but heavily regulated stablecoins. 

This compromise was supported by both Republican and Democratic lawmakers until Deese and Ramamurti’s intervention led Democrats to insist that regulatory authority be given solely to the Federal Reserve and national banks. 

This shift in position effectively negated the purpose of the bill, given that federal regulators had already issued guidance prohibiting national banks from engaging with crypto.

Implications for the Future

Harris’s engagement with Deese and Ramamurti suggests a potential continuation of policies that view the crypto sector with skepticism and emphasize strict regulation to squash risks. This approach could mean ongoing challenges for the industry as Harris’s campaign develops its economic policy platform.

Crypto holders, users, and businesses likely need to keep a close eye on these developments, as the continuation of such policies could have significant impact on the asset class within the US.Source: Information derived from posts by Alex Thorn (@intangiblecoins) on X.