Senators Urge Top Regulator to Stay Out of Prediction Market Lawsuits

Wired

by Kate Knibbs

February 13, 2026

AI-Generated Deep Dive Summary

Senate democrats are calling on the cftc to avoid getting entangled in ongoing legal disputes involving prediction market platforms like polymarket and kalshi. in a letter signed by 23 senators, including adam schiff, cory booker, and amy klobuchar, they urge the agency to refrain from intervening in state-level lawsuits challenging the legality of these platforms. the lawmakers also want the cftc to prohibit contracts related to "war, terrorism, assassination, or other enumerated activities." prediction markets have surged in popularity over the past year, allowing users to bet on a wide range of real-world events, from geopolitical conflicts to entertainment choices. however, this growth has sparked ethical and legal concerns. for instance, israeli authorities recently arrested individuals suspected of using classified military information to trade on polymarket. meanwhile, state regulators are increasingly treating these platforms as gambling operations, leading to lawsuits across the country. the cftc, which oversees prediction markets under federal law, has shown mixed approaches. during the biden administration, the agency proposed restricting certain types of contracts, such as those tied to sports or politics. however, under the trump administration, the cftc took a more lenient stance, even forming an advisory board that includes major platform executives. current chairman michael selig has emphasized the cftc's exclusive jurisdiction over these markets but has also rejected comparisons to traditional gambling. the senators' letter reflects a broader debate over how to regulate this rapidly evolving industry. while some argue for federal oversight, others, including state authorities and ethical advocates, are pushing for stricter controls or outright bans on controversial contract types. the outcome of these legal battles could shape the future of prediction markets, determining whether they remain a niche tech phenomenon or become mainstream financial tools. this issue matters to tech enthusiasts because it highlights the intersection of regulatory frameworks and innovative technologies. as prediction markets grow, questions about their ethical implications, legal status, and potential misuse will continue to dominate public discourse. the decisions made by the cftc and state regulators could set precedents for how similar platforms are treated in the future, influencing both their growth and accessibility.

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Originally published on Wired on 2/13/2026