Democrats Press CFTC to Police War Prediction Bets
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- House Democrats, led by Reps. Seth Moulton and Jim McGovern, sent a letter to CFTC Chair Michael Selig questioning why the agency hasn't acted against bets placed on war and government actions via offshore prediction markets like Polymarket and Kalshi.
- The letter cited 'alleged insider trading' on platforms relating to the military's intervention in Venezuela and the U.S.-Israeli attack on Iran, including well-timed bets on the ouster of Venezuelan President Nicolás Maduro.
- The lawmakers argued the Commodity Exchange Act gives the CFTC authority to police offshore swap activities with 'a direct and significant connection with activities in, or effect on, commerce of the United States,' and should be used to enforce its existing ban on bets relating to terrorism, assassinations, and war.
- The Democrats asked whether the CFTC is aware of conflicts of interest between 'major market participants and family members of Executive Branch officials, including the President' — noting that Donald Trump Jr. is an investor in and unpaid advisor to Polymarket and a strategic advisor to Kalshi.
- CFTC Chair Selig has taken an aggressively federal-only stance, suing Arizona, Illinois, and Connecticut over cease-and-desist orders to prediction markets; on Monday a federal appeals court in New Jersey ruled gaming regulators cannot bar Kalshi sports bets.
- Lawmakers have introduced a flurry of bills in recent weeks targeting prediction markets, with Moulton announcing an officewide staff ban on the platforms last month; a group of Democratic senators sent Selig a separate February letter warning about event contracts 'that incentivize physical injury or death.'
Why it matters: The April 15 deadline forces Selig to publicly answer whether the CFTC will police platforms with documented ties to the president's son — and the Democrats' citation of the Commodity Exchange Act challenges his own argument that federal authority over prediction markets is settled. With multiple bills already in the pipeline and a federal court backing Kalshi over state regulators, the letter lands at a pivotal moment in defining who controls the fast-growing event-contract industry.
Ask SkimNews
