Congress Grills CFTC Head Over Integrity of Predictions

It’s safe to say that Commodity Futures Trading Commission chairman Michael Selig did not enjoy his latest Congressional hearing. 

The House Committee on Agriculture grilled Selig for around four hours on Thursday, with a heavy focus on prediction markets. While Selig’s unwavering support for the industry was not shaken, questions from lawmakers still raised significant concerns.

The biggest topic lawmakers focused on was the integrity of prediction markets. Some referenced the suspicious betting patterns around oil prices and the US action in Venezuela as examples of the CFTC’s inability to handle the issue. While Selig continually insisted that the federal regulator was focused on investigating and prosecuting instances of insider trading, this did little to soothe the fears of committee members.

Another contentious topic was the prediction industry’s fight against states, many of which want to either regulate or ban it. 

“We also need a full review of whether these [prediction] platforms violate local and state gaming laws,” Rep. Angie Craig said in her opening statements for the hearing. “And keep in mind the unique role that tribal governments play in this space as well. This is exactly why we need strong rules, regulations, clear guardrails, and consumer protections, and why we need the CFTC fully equipped to enforce these protections

The chairman was hammered over the issue, though he once again shared that the industry is clearly protected by the Commodity Exchange Act, which supersedes state gambling laws.

Democrats on the committee also pushed for answers on why no other commissioners have been added for the regulator, which is supposed to have six.

MLB Deal with Polymarket Looks Worse and Worse

Last month, MLB commissioner Rob Manfred surprised many by announcing that Polymarket would become the first prediction market partner of the league. The news came just months after a massive betting scandal was uncovered involving two MLB pitchers. 

This led many to question the decision, but Manfred insisted that Polymarket and the CFTC would handle integrity monitoring better than sportsbooks. Selig echoed these words, but the recent Congressional hearings show that lawmakers (and by extension, the public) aren’t buying it.

If the MLB faces any suspicions of betting schemes involving prediction markets, it could be devastating. It would further shake fans' faith in the integrity of the game while also showing Manfred’s poor handling of the situation. With the prediction industry failing to win over public support, the MLB’s decision to partner is looking worse and worse.