CFTC Chairman Mike Selig came out swinging in the fight against state regulations of prediction markets, declaring they aren't gambling and that his agency has "exclusive jurisdiction" to regulate the space. The big question: Is the CFTC prepared or equipped to take on the full scope of prediction markets in the age of retail trading? CFTC is expected to create more rules around prediction markets, particularly defining insider trading. But prediction markets have become a much larger retail phenomenon than traditional derivatives, and there are serious questions about what further regulation is needed. Goodwin partner Andrew Kim notes: "The Commodities and Exchange Act wasn't intended for individual trading." Selig took to multiple platforms over recent days to argue that prediction markets "aren't new" and have a legitimate economic purpose by hedging risk. Selig's move would severely limit the tools states have to regulate prediction markets.
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