Former SEC and CFTC Chair Gary Gensler argued in an amicus brief that sports prediction markets are not exempt from state regulations and that the CFTC lacks federal authority over them. He supports Ohio's appeal against prediction market platform Kalshi.
The differing interpretations of regulatory authority over prediction markets could significantly impact the future of these platforms and the states' ability to regulate gambling and related activities.
Former SEC and CFTC Chair Gary Gensler has filed an amicus brief arguing that sports prediction markets are not exempt from state regulations and that the Commodity Futures Trading Commission (CFTC) lacks exclusive federal authority over them. Gensler contended that the Dodd-Frank Act, passed in 2010, was intended to address the 2008 financial crisis and not to authorize a national sports-betting regime.
Gensler's filing supports the State of Ohio in its appeal against prediction market platform Kalshi, which is challenging state cease-and-desist orders. He argued that concerns over gambling and addiction are best handled at the state level. This stance aligns Gensler with numerous state regulators, tribes, and gaming associations who have also filed briefs supporting state authority.
The legal battle involves multiple states and highlights a broader conflict over jurisdiction. The CFTC has sued six states to defend its claim of exclusive federal authority, a position also supported by President Donald Trump. Gensler's argument invokes the major-questions doctrine, suggesting that Congress would need explicit approval to grant such broad regulatory power to an agency over a large industry.