Polling data released on June 24 by the Coalition for Prediction Markets found that 48% of Republican voters and 45% of Democratic voters prefer federal oversight through the Commodity Futures Trading Commission. State-level regulation trailed significantly, drawing support from just 27% of Republicans and 35% of Democrats. Only 8% of respondents wanted prediction markets banned outright.
The federal vs. state showdown
The surveys, conducted by Tony Fabrizio and Global Strategy Group, land right in the middle of an escalating jurisdictional fight. The CFTC has been locked in a tug-of-war with more than 40 states and tribal governments over who gets to regulate event contracts. Many of those states classify prediction markets as gambling, which puts them squarely under state authority. The CFTC disagrees, arguing that its exclusive jurisdiction under the Commodity Exchange Act covers swaps and event contracts traded on registered designated contract markets.
The result has been a patchwork of litigation across multiple federal districts, with preliminary rulings going in both directions.
On June 10, the CFTC took its most concrete step yet toward resolving the dispute. Chair Michael Selig oversaw the release of a Notice of Proposed Rulemaking that outlines a three-part analysis for evaluating event contracts. The framework focuses on contracts involving sensitive activities like terrorism or unlawful conduct, while signaling that sports-related contracts would generally be permitted. The NPRM essentially draws a line: contracts traded on CFTC-registered exchanges should fall under federal purview.
