BlockBeats News, May 12th, US Commodity Futures Trading Commission (CFTC) Chairman Michael Selig stated that the regulatory agency is in talks with all major US professional sports leagues to enhance regulation of the sports prediction market, focusing on combating insider trading and market manipulation.

Previously, in March of this year, the CFTC signed a data sharing agreement with Major League Baseball (MLB), marking the first formal information sharing partnership between a federal regulatory agency and a professional sports league. With prediction market platforms such as Kalshi and Polymarket accelerating their entry into sports event contracts, the conflict between federal regulation and state gambling regulation is also escalating.

Speaking at the FINRA Annual Conference, Selig stated that the CFTC has sued "about five or six states" because these states are attempting to block event contract operations under federal regulation. He emphasized that derivative products regulated by the CFTC fall under federal jurisdiction, not state gambling law.

He referred to the sports prediction market as a "different product, parallel regulatory system" compared to traditional gambling. Regarding insider trading, Selig mentioned a case handled by Kalshi: an employee of YouTube star MrBeast allegedly used unpublished content release times to trade. He also gave examples such as team trainers and staff members who may engage in insider trading if they have advance knowledge of player injury information and trade on it.

Selig stated that the trading platforms themselves remain the first line of regulation, as they are responsible for KYC and AML checks, which can help identify suspicious trading activities.

In addition, the CFTC is also coordinating with the SEC to study the regulatory framework for ETFs and investment products related to the prediction market. This is seen as another signal of the US shifting towards a more open attitude towards the regulation of prediction markets and crypto financial products during the Trump administration.