Catenaa, Thursday, February 18, 2026- Paul Atkins told lawmakers last week that prediction markets are a “huge issue” drawing regulatory attention, as the US Securities and Exchange Commission and US Commodity Futures Trading Commission confront overlapping jurisdiction and rising legal scrutiny.
Speaking before the Senate Banking Committee, Atkins said prediction markets present potential jurisdictional overlap between the SEC and CFTC.
He noted that most event-based contracts fall under the CFTC’s authority, though both agencies are coordinating closely.
Prediction platforms such as Kalshi and Polymarket have expanded rapidly since the 2024 US election cycle.
The growth has intensified debate over whether federal derivatives law preempts state gaming rules.
Operators argue that event contracts are federally regulated derivatives under the Commodity Exchange Act, giving the CFTC exclusive oversight. Several states have challenged that view, filing litigation alleging violations of local gambling laws, particularly for sports-related markets.
Atkins said the SEC has sufficient authority where securities laws apply, adding that classification depends on product structure and wording. He stopped short of outlining new rulemaking, saying regulators will assess next steps.
The remarks come as the SEC and CFTC collaborate on “Project Crypto,” aimed at modernizing oversight of digital assets. The agencies now meet weekly, Atkins said, following earlier tensions over crypto jurisdiction.
CFTC Chair Michael Selig, speaking separately, said regulators are working to craft rules that protect investors while keeping markets onshore.
Lawmakers also questioned vacancies at both agencies. The SEC currently lacks Democratic commissioners, while the CFTC has only one sitting member. Atkins said he supports a full complement of commissioners to strengthen debate and oversight.
