CFTC regulation of prediction markets draws scrutiny as Atkins backs Selig

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CFTC regulation of prediction markets

Highlights

CFTC requests a $410 million budget for fiscal year 2027, up 12.3% year-over-year, with only about 550 employees and four commissioner seats vacant.
Prediction markets like Polymarket and Kalshi reach multibillion-dollar valuations, pushing the CFTC to assert exclusive federal jurisdiction and propose permitting sports betting contracts with limits on certain outcomes.
Pending federal legislation could grant the CFTC sweeping cryptocurrency oversight, while Chair Michael Selig cites recruitment and artificial intelligence efforts to address expanding responsibilities.

CFTC budget, staffing and leadership in focus

As reported by CNBC, U.S. Securities and Exchange Commission Chair Paul Atkins says Commodity Futures Trading Commission Chair Michael Selig is capable of handling the agency's expanding responsibilities, even as questions persist over whether the derivatives regulator has the resources to oversee prediction markets.

During a Tuesday morning interview, Atkins defends Selig and says he is doing a great job at the CFTC while trying to make sense of innovative products traded globally. For fiscal year 2027, the CFTC asks Congress for a $410 million budget, about 12.3% higher than the previous year, while the SEC seeks $1.908 billion, a decrease from fiscal year 2026.

The staffing gap is also significant. The SEC has more than 4,000 employees, compared with about 550 at the CFTC, and Selig is currently the agency's only commissioner, with four seats vacant.

Prediction markets and crypto widen the agency's remit

Prediction markets, which let users wager on outcomes ranging from sports events to unusual public scenarios, have grown rapidly, with companies such as Polymarket and Kalshi reaching multibillion-dollar valuations after gaining popularity around the 2024 elections.

Over the past year, the CFTC has pushed to preserve federal authority over sports-related prediction markets and has sued several states in pursuit of exclusive jurisdiction as state regulators resist. Last week, the agency also unveiled a broad proposed rule that would generally permit sports betting through prediction markets while limiting contracts tied to terrorism and assassinations.

The CFTC may soon face an even broader mandate because lawmakers are working on federal legislation that would give the agency sweeping authority over cryptocurrency markets. At an April congressional hearing, Republican House Agriculture Chair Glenn Thompson highlights the pressure on the agency and tells Selig to inform the committee if the need for additional qualified staff emerges.

Last week, Selig says in a post on X that the CFTC is hiring, recruiting top talent and using artificial intelligence to look for insider trading, among other tasks.

Our earlier article on Britain’s review of defined benefit pension transfer rules explained how an unusual deal prompted the government to reassess whether existing safeguards still fit today’s more innovative pension restructuring market. We noted that the review could lead to tighter oversight of how pension liabilities are reassigned, affecting future transactions involving pension schemes, asset managers and sponsoring employers.

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