Gensler files amicus brief arguing CFTC can't override…

Former CFTC and SEC Chair Gary Gensler filed an amicus brief with the Sixth Circuit Court of Appeals late Thursday, arguing that federal law does not grant the CFTC authority to oversee prediction markets tied to sports events. Gensler's brief contends that Congress never intended sports betting contracts to qualify as swaps under the Commodity Exchange Act or Dodd-Frank, writing that such contracts "do not fit the CEA's purpose or the statutory language defining swap, which focus on hedging economic risk."

Why it matters

The filing puts Gensler — who chaired the CFTC from 2009 to 2014 and oversaw Dodd-Frank implementation — directly at odds with the current CFTC under Chair Mike Selig, which filed its own brief last month arguing the opposite. Joining Gensler are the Indian Gaming Association, Native American tribal organizations, the American Gaming Association, and Better Markets, all targeting prediction market provider Kalshi's sports contracts. The case stems from a preemptive lawsuit Kalshi filed against Ohio; a federal judge ruled against Kalshi in March. Courts are now split: the Third Circuit sided with prediction markets in April, while the Ninth Circuit appeared more favorable to states.

Market impact

The stakes are significant for the prediction market sector. If states prevail at the Supreme Court level — where the issue is widely expected to land — platforms like Kalshi face state-by-state registration requirements and potential criminal liability in jurisdictions like Arizona. If the CFTC's position wins, states lose substantial gaming tax revenue.