Utah Gov. Spencer Cox said Tuesday he will go to court to block prediction markets, calling them “gambling — pure and simple” and rejecting the federal agency’s claim of authority over the platforms.
Commodity Futures Trading Commission Chairman Michael S. Selig announced via X that the commission is filing a friend-of-the-court brief to defend its jurisdiction over these derivative markets.
“Today the CFTC is taking an important step to ensure that these markets have a place here in America,” Selig wrote. “To those who seek to challenge our authority in this space, let me be clear, we will see you in court.”
“These markets” refers to prediction markets, platforms that let users buy and sell contracts based on the outcome of events, from local elections to major sports contests.
Each contract is essentially an agreement that pays out if the predicted outcome occurs, which is why many, including Utah’s governor, see them as little different from placing bets.
Cox took to X Tuesday to respond directly to the commission chairman, vowing a fight in court.
“They have no place in Utah,” Cox posted.
What are prediction markets?
Prediction markets are online platforms where users buy and sell contracts based on the outcomes of real-world events. Unlike traditional stock markets, these contracts pay out only if the predicted event occurs.
Trading on these platforms has grown rapidly.
According to Ethan Bauer of the Deseret News, monthly trading volume rose from about $100 million at the start of 2024 to more than $13 billion by the end of 2025, an increase of nearly 13,000%.
Proponents say prediction markets provide valuable forecasting data and are regulated as derivatives by the Commodity Futures Trading Commission, rather than as gambling.
Platforms such as Kalshi, Polymarket and Coinbase have surged in popularity, with billions wagered on events — including sports — in ways critics say bypass state gambling laws, according to The New York Times.
Selig defends federal authority
Selig said that event contracts are “swaps” under the Commodity Exchange Act, a type of derivative that allows two parties to speculate on future market conditions without owning the underlying asset.
These contracts serve legitimate economic purposes, such as helping farmers hedge against temperature changes or small businesses protect against tax increases.
Selig argued that letting states regulate these contracts as gambling would undermine federal law and disrupt financial innovation.
State lawmakers move to restrict prop bets
As reported by KSL, the Utah Legislature is advancing HB243, which would clarify that proposition bets — wagers on individual player performances or specific in-game events — fall under the definition of gambling prohibited by the state Constitution.
Gov. Spencer Cox’s response to Selig highlights Utah’s strict anti-gambling stance and reflects broader concerns about the societal harms of easy-access betting, including addiction and financial ruin.
His threat of legal action signals a potential showdown between state sovereignty and federal preemption in regulating these markets.
As the debate intensifies, it could reshape how Americans engage with betting on sports and other events.