Bloomberg Talks Podcast: CFTC Chairman Michael Selig Talks Prediction Markets

Date: March 10, 2026
Host: Bloomberg
Guest: CFTC Chairman Michael Selig

Overview

This episode features a deep-dive interview with Michael Selig, Chairman of the Commodity Futures Trading Commission (CFTC). The main focus is on the current boom in prediction markets, regulatory challenges, distinctions between speculation and economic functions, risks relating to insider trading and manipulation, questions about gambling vs. derivatives, and the regulatory future for blockchain-based and digital asset markets. Selig offers thoughtful, regulatory-insider insight into how the CFTC balances innovation, consumer protection, and adaptation to emerging technology.

Key Discussion Points & Insights

1. Why Prediction Markets Matter Now

[00:38–01:33]

• Peak public interest due to a decline in trust in traditional media; social media and alternative “information markets” are filling the gap.
• Selig: “People are trusting and relying on social media, prediction markets, Twitter, you know, all sorts of new media sources…that's not a bad thing.” (00:49)
• He views the proliferation of prediction markets positively, as they encourage exploration and provide new forms of information and hedging.

2. Legitimate Economic Functions vs. Speculation

[01:33–03:06]

• Selig affirms that event contracts allow hedging of event-driven risks and enable market participants to manage uncertainty, but acknowledges that some contracts, especially those aimed at entertainment (e.g., outcomes of TV shows), blur the line between hedging and speculation.
• Selig: “As a regulator, it's not my job to tell them what to hedge and what not to hedge…each exchange as an SRO has the responsibility to evaluate the products it lists…We’re not doing that as a kind of merit based regulator.” (02:09)

3. Manipulation and Insider Trading Concerns

[03:06–04:16]

• The CFTC does not pick “winners and losers” in products, but exchanges must prove their listings are not easily manipulated.
• Notable enforcement example: Kalshi’s product related to Mr. Beast led to action against a Mr. Beast employee for trading on non-public information.
• Memorable moment:
  • Interviewer: “Did you ever think you'd be talking about Mr. Beast?”
  • Selig: “I did not. That was not, you know, on the bingo card for sure.” (04:16)

4. Sports Markets: Prediction Market vs. Gambling

[04:19–06:13]

• 88% of US prediction market activity is in sports. Selig distinguishes derivatives from gambling by contract structure, federal vs. state regulation, and market function.
• Selig explains the CFTC’s “broad definition of commodity” means they treat sports contracts and more traditional contract types equally under law.
• Selig: “We have a very standardized system where you have a contract that allows here for a binary option where you are paid out based on an outcome…But…they are structured very differently from, for example, gambling.” (04:36)

5. Age Restrictions and Regulatory Overlap

[06:13–07:15]

• Age differences between sports betting platforms (21+) and prediction market access (often 18+) are due to different regulatory regimes (state vs. federal).
• Selig compares this to insurance regulation, which also varies between state and federal levels.

6. The Challenge of “Death Markets” and Minimum Effective Regulation

[07:15–09:38]

• Selig expounds on the CFTC’s philosophy: regulations should be like the “minimum effective dose” in medicine—not stricter than necessary.
• Exchanges must not list contracts on prohibited subjects like assassination or terrorism.
• Contracts must be “tethered” to specific political events to avoid turning into “death markets”; 2024 election contracts are cited as a recent test case.
• Selig: “It’s very important to tether some of these political contracts to an actual political event. And that cabins the risk of something turning into an assassination market.” (08:53)

7. US vs. International Regulation — The Polymarket Question

[09:38–11:19]

• Differences between how Kalshi (US) and Polymarket (international) are regulated. Polymarket's offshore status results from US regulatory enforcement.
• Selig clarifies that the CFTC does not regulate the Polymarket International platform.
• However, the US-based Polymarket is under the CFTC’s oversight.
• Selig is optimistic about the integration of blockchain-based markets within the US regulatory perimeter:
  • “I think the potential of on chain markets is huge. And if you combine the decentralized truth aspects of a blockchain and prediction markets, I think that's going to be a really exciting thing to have here in the United States.” (11:04)

8. Digital Assets, Blockchain, and Legislative Needs

[11:19–12:21]

• The CFTC works to modernize and remain prepared for on-chain markets, regardless of Congressional delays around the Clarity Act.
• Selig stresses the risk of not future-proofing regulation, referencing the Supreme Court’s stance on statutory authority.
• “It’s really unacceptable to be pushing all this stuff offshore simply because it's different type of technology… there's a lot we can do with or without legislation.” (11:27, 12:17)

9. CFTC’s Enforcement and Human Resource Status

[12:21–13:21]

• Addressing concerns about enforcement staff, especially in the Chicago office.
• Selig shares that new hires are underway and emphasizes efficiency gains from AI and automation.
• “We're not operating kind of like a Starbucks model where you have, you know, an office on every block…But we're also in a world where AI and automation are allowing us to do so much more with less individuals.” (12:38)

Notable Quotes

• “As a regulator, it's not my job to tell them what to hedge and what not to hedge.” — CFTC Chair Michael Selig (02:09)
• “We’re not doing that as a kind of merit based regulator where picking winners and losers. But it is important that each product has integrity and that they're not susceptible to insider trading and manipulation.” (02:54)
• “It's very important to tether some of these political contracts to an actual political event. And that cabins the risk of something turning into an assassination market.” (08:53)
• “I think the potential of on chain markets is huge…that's going to be a really exciting thing to have here in the United States.” (11:04)
• “We're also in a world where AI and automation are allowing us to do so much more with less individuals.” (13:06)

Segment Navigation (Timestamps)

• 00:38 | Why prediction markets are in the spotlight
• 01:33 | Economic functions and hedging vs. speculation
• 03:06 | Insider trading, market manipulation, and Mr. Beast case
• 04:19 | Sports markets: prediction vs. gambling, CFTC's view
• 06:13 | Age/legal access differences across platforms
• 07:15 | Regulating “death markets” and political event contracts
• 09:38 | Kalshi vs. Polymarket: US & international regulation
• 11:19 | Blockchain, digital assets, the Clarity Act
• 12:21 | Enforcement staffing, resource allocation, and automation

Memorable Moments

• CFTC’s separation from “merit-based” regulation, leaving responsibility for evaluating contract suitability to exchanges
• Enforcement against Mr. Beast insider trading—unexpected case study
• Selig’s readiness to embrace blockchain integration if legal hurdles can be overcome

This episode offers a candid, current, and detailed look at how the CFTC approaches prediction markets in a time of rapid technological and social change, providing clarity on what separates regulatory regimes, how illicit activities are handled, and why a pragmatic, future-looking perspective is essential for US market competitiveness.