Event contracts let people trade on the outcome of real-world events, such as elections or sports results. To the CFTC, these are derivatives that fall under federal oversight. To a number of states, they look a lot like sports betting, which states have traditionally regulated themselves.
Selig’s position is that this ambiguity is a matter for courts and regulators to sort out. Treating it as grounds for prosecuting founders, he argues, crosses a line.
He has also framed the issue as bigger than Kalshi. Selig contends that a patchwork of state laws threatens the operational integrity of major financial exchanges, naming the NYSE and CME as examples.
The CFTC’s broader offensive
Selig is not just talking. Since taking over the agency, he has led lawsuits against at least 10 states, arguing that federal authority over event contracts and prediction markets is exclusive.
The research describes his commitment to defending CFTC jurisdiction through litigation that could potentially escalate to the Supreme Court.
In July 2026, the CFTC invoked emergency authority to direct Kalshi to honor trades in Michigan, despite court orders pointing the other way.
Then came the geofencing guidance. On November 5, 2026, Selig issued interpretive guidance requiring designated contract markets to remove geographic access restrictions within 30 days.
Geofencing is the practice of blocking users based on their location. Platforms have used it to wall off states where they face legal trouble, effectively offering their product everywhere except the places that object.
The CFTC’s guidance says that approach conflicts with impartial-access rules, which require regulated exchanges to treat participants evenly. The guidance runs counter to state court orders in places like Michigan and Nevada. Platforms now face a federal regulator telling them to open the gates and state courts telling them to keep them shut.
Why this fight has been building
Utah’s decision to pursue criminal enforcement against executives marks an escalation from civil disputes and cease-and-desist letters into the realm of personal legal jeopardy for the people running these companies.
Selig, appointed in December 2025, has responded by making exclusive federal jurisdiction a centerpiece of his tenure. The lawsuits, the emergency directive in Michigan and the geofencing guidance all point in the same direction.
What this means for platforms and traders
The 30-day window on the geofencing guidance sets up a near-term test of whether platforms follow the CFTC or the state courts in Michigan and Nevada.
The progress of the CFTC’s lawsuits against at least 10 states will indicate whether federal courts back the agency’s claim of exclusive authority.
Utah’s case against Kalshi and its executives is now the clearest example of how far states are willing to go.
For now, prediction market operators sit in an uncomfortable spot: federally regulated, federally defended and still facing the possibility of state prosecution. Selig has made clear which side he is on.
