CME & CFTC Clash Over Predictions Oversight
CME Group CEO Terrence Duffy and Commodity Futures Trading Commission (CFTC) Chair Michael Selig publicly disagreed over how prediction markets should be regulated during the CFTC's first Innovation Advisory Committee meeting on Thursday, 20 August.
Duffy raised concerns that some prediction-market contracts are vulnerable to manipulation, a position he has voiced before as CME has built out its own event-contracts business, which has launched more than 100 million contracts since debuting last year.
Selig interjected during the exchange to say that the specific contracts Duffy referenced had not been listed in the US. Kalshi chief operating officer Luana Lopes Lara later turned the debate back on Duffy, asking whether CME itself had ever faced problems with market manipulation.
A 30-Member Committee
The committee, convening for the first time, includes more than 30 members drawn from Polymarket, Kalshi, Coinbase, Robinhood and Nasdaq, among others.
While the session also covered crypto and AI regulation, the most heated exchanges centred on prediction markets, including growing concern within the committee over so-called “mention markets”.
The exchange reflects a broader standoff between federal regulators and state gaming authorities over who has authority to oversee the fast-growing prediction-market sector.
Selig has previously argued the CFTC holds “exclusive jurisdiction” over prediction markets, including sports-related contracts, and the agency has sued several states that have tried to intervene. Selig said at the meeting he expects the CFTC to propose further amendments to how designated contract markets list event contracts, alongside additional consumer-protection standards.
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Why It Matters
The public friction between a major exchange operator and the CFTC's own chair signals that the fight over prediction-market oversight is far from settled, even as platforms like Kalshi and Polymarket continue to expand their sports-adjacent offerings under federal, rather than state, regulation.
The CFTC is the US federal regulator responsible for overseeing derivatives markets, including the event and prediction contracts now offered by exchanges such as CME, Kalshi and Polymarket.
Its stance that it holds exclusive jurisdiction over these products, including sports-related contracts, has put it directly at odds with state gaming regulators who argue such products amount to unlicensed sports betting.
Selig said the CFTC intends to bring forward further amendments governing how designated contract markets list event contracts, alongside additional consumer-protection requirements, suggesting the rules underpinning Thursday's disagreement are still actively being written rather than settled. The committee's next steps on prediction markets specifically were not detailed at the meeting.
Committee Composition
The Innovation Advisory Committee's inaugural meeting brought together more than 30 members spanning traditional derivatives exchanges, prediction-market platforms and crypto firms, a mix the CFTC designed specifically to surface exactly the kind of disagreement that played out publicly between Duffy and Selig on prediction-market oversight.
Neither Duffy nor Selig walked back their positions during the meeting, leaving the core disagreement over how prediction markets should be classified and supervised unresolved heading into the CFTC's next round of rulemaking on the sector.
