Tribal leaders leave CFTC with no answers on prediction market rules

At some point on Monday, Jason Giles walked out of CFTC headquarters in Washington having been told, repeatedly, that the rules he had traveled to discuss could not be discussed. A dozen tribal leaders had come to meet Michael Selig, the sole commissioner of the Commodity Futures Trading Commission, with a specific agenda: the proposed amendments to Regulation 40.11, the advertising of event contracts on tribal land, the question of what CFTC rulemaking meant for tribal sovereignty. Selig and his staff declined to engage with any of it. "All they would say was, 'We can't talk about the rule right now,'" Giles told the IGA's New Normal webinar two days later.

The comment period on those proposed amendments had already closed. The rule had been filed. There was no obvious procedural reason for the silence, and Giles said he could not identify one. Scott Crowell, who represents tribal gaming interests at the Crowell Law Office Tribal Advocacy Group, offered his own interpretation when Giles asked what the refusal signaled: the CFTC under Selig had already decided the rule's direction, and the meeting was never going to change it.

Crowell's language was not diplomatic. He accused Selig of having promised Congress that the courts would resolve the sports betting question, then immediately filing amicus briefs in the Ninth Circuit litigation to push back against the rulings that followed. Whether or not that characterization is precise, the underlying dynamic it describes has become the structuring fact of this dispute. The CFTC has been losing in court — the Ninth Circuit found, unanimously, that the tribes' IGRA arguments were valid, that Kalshi's sports-event contracts looked more like bets than derivatives, and that the district court had been wrong to classify them as federally regulated instruments. Selig has not retreated. He has asserted exclusive CFTC authority over event contracts on federally licensed exchanges and, according to Crowell, directed those exchanges to resist state and court enforcement.

The consensus reading of this standoff holds that the CFTC's legal position is weakening and that the agency will eventually have to accommodate tribal and state concerns through the rulemaking process. That reading may be right about the direction and wrong about the mechanism. Rulemaking offers Selig something that litigation does not: the ability to set terms rather than accept them. If the agency finalizes Regulation 40.11 amendments before the courts force a harder outcome, it controls the frame within which any negotiation happens. The silence in Monday's meeting, which seemed like stonewalling to the tribal leaders present, fits that reading. An agency that intends to compromise does not refuse to discuss a rule whose comment period has closed. An agency that intends to finalize on its own terms does.

Crowell's read is that Selig treats every loss as a reason to press harder — that the pattern of the Trump administration is to double down rather than adjust. Whether that observation reflects genuine strategic calculation or simply describes a refusal to acknowledge constraint, the effect is the same. The tribal leaders left without answers. The rulemaking continues without them.