Hands Off Approach for Predictions
During hearings over his nomination, Selig refused to support or oppose prediction markets. Instead, he shared his belief that the US Supreme Court will likely decide on the industry’s legality.
While he acknowledges the CFTC’s role as the sole regulator, he believes the courts are better suited to rule on the issues being debated. Many lawsuits center on several US laws involving commodity trading, with both sides interpreting key passages and phrases differently. The CFTC doesn’t have the authority to change US laws, which is why Selig believes a hands-off approach is appropriate.
Selig’s Stance Comes With Risks
While Selig’s background as a lawyer makes his stance on prediction markets far from surprising, some fear it will lead to devastating results.
The world of prediction markets has exploded since the White House first started searching for a new CFTC head. More markets have been added, including player props and parlays. There has also been an influx of operators, including big names like Polymarket, DraftKings, FanDuel, Fanatics, and Underdog.
There is fear that Selig’s refusal to have the CFTC step in will allow this unprecedented expansion to remain unregulated. A lack of regulations or protocols to address issues such as problem gambling and betting scandals will allow both to thrive, ultimately hurting customers the most.
Selig’s Hands May Be Tied
Selig’s background has convinced many that he is a strong supporter of prediction markets, which is likely why he received the nomination.
While Selig’s stance will be attacked, the new chairman may not be able to do much else. The White House has deep ties to the prediction market industry and could quickly replace Selig if he doesn’t fight to protect them. That has prevented the CFTC from taking action before, despite the strong opposition from both red and blue states.
