Woofun AI reports that 17 Democratic US senators have formally requested the Senate Appropriations Subcommittee on Financial Services and General Government to prohibit the Commodity Futures Trading Commission from utilizing federal funds in legal disputes against state authorities. Senator Richard Blumenthal, Senator Jeff Merkley, and 15 colleagues sent a letter on Wednesday targeting Chair Michael Selig's strategy of asserting "exclusive jurisdiction" over prediction markets by classifying event contracts as "swaps". The legislators argue that this litigation campaign threatens to transform the agency into an enabler for platforms bypassing state consumer safeguards, thereby creating a "race-to-the-bottom in gambling".

The CFTC has initiated legal confrontations with regulators in Connecticut, Illinois, Arizona, Kentucky, Wisconsin, New York, Minnesota, Rhode Island, and New Mexico as of June. Industry players such as Kalshi and Polymarket have filed their own suits against state bodies, explicitly supporting the CFTC's regulatory stance.

Woofun AI data shows that these coordinated legal efforts involve nine distinct state jurisdictions where federal and corporate interests are challenging local gaming oversight.

Chair Michael Selig, currently the sole commissioner under President Donald Trump, has unilaterally directed the agency's policy to aggressively pursue state authorities enforcing crackdowns on prediction markets. Although the commission is statutorily designed to include a bipartisan group of five commissioners, no appointments have been announced as of Friday, leaving Selig with unchecked authority over the agency's agenda. This concentration of power coincides with the anticipated Senate vote on the Digital Asset Market Clarity (CLARITY) Act, which aims to delineate regulatory boundaries between the CFTC and the Securities and Exchange Commission.

Gaming organizations recently petitioned the Senate to exclude sports event contracts from the CLARITY Act, contending that the CFTC was never intended to regulate such wagers. The senators' intervention highlights a growing friction between federal regulatory expansion and state-level consumer protection frameworks. This legislative push marks a significant escalation in the ongoing jurisdictional conflict over the future of prediction markets in the United States.