US senators push to end CFTC ‘assault’ on state oversight of prediction markets

Seventeen Democratic U.S. senators urged the Commodity Futures Trading Commission (CFTC) on May 14, 2024, to cease using its funds for legal actions against state-regulated prediction markets. The senators described these actions as an "assault" on state oversight in a letter addressed to CFTC Chair Rostin Behnam. They specifically criticized the CFTC's efforts to assert federal jurisdiction over prediction markets that operate under state licenses, arguing that this federal overreach undermines state regulatory authority. The senators highlighted that these prediction markets, which allow individuals to bet on future events, are already subject to state-level regulations and oversight. They expressed concern that the CFTC's aggressive stance could stifle innovation and limit the availability of these markets to the public. The letter also suggested that the CFTC's focus on these markets diverts resources from more significant regulatory challenges. The senators called for a collaborative approach between federal and state regulators to ensure market integrity without infringing on state autonomy. This pushback from a significant bloc of senators indicates growing congressional scrutiny of the CFTC's regulatory scope and enforcement priorities regarding novel financial instruments.