Gary Gensler, a former chairman of both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), has submitted an amicus brief challenging the CFTC’s asserted authority over sports wagering and prediction markets. This legal stance positions Gensler against the current CFTC Chair, Michael Selig, and the prediction market platform Kalshi, both of whom contend that such contracts fall under federal regulatory oversight.
Key Takeaways
- Former SEC and CFTC Chair Gary Gensler argues the Dodd-Frank Act does not empower the CFTC to regulate sports wagering.
- Gensler’s position contradicts the current CFTC Chair and the prediction market platform Kalshi.
- The dispute centers on Kalshi’s offering of sports-related event contracts, which Ohio regulators attempted to prohibit.
- The CFTC, under Chair Selig, has been actively seeking to expand its jurisdiction over prediction markets.
- Concerns are raised about the CFTC’s funding and capacity to effectively oversee these complex markets.
In a brief filed with the U.S. Court of Appeals for the Sixth Circuit, Gensler asserted that the Dodd-Frank Act, enacted following the 2008 financial crisis, did not grant the CFTC the authority to preempt state laws concerning sports betting. He stated in the brief that if Dodd-Frank had indeed preempted states on sports betting, it would have been a significant and widely discussed aspect of the legislation at the time, which it was not.
Gensler’s past tenure includes leading the SEC from 2021 to 2025, where he characterized most cryptocurrencies as securities and initiated numerous enforcement actions against prominent crypto firms such as Coinbase and Kraken. Prior to that, he chaired the CFTC from 2009 to 2014, overseeing the implementation of the Dodd-Frank rules.
The amicus brief was submitted in the context of a lawsuit filed by Kalshi against the state of Ohio. Kalshi initiated legal action in October 2025 after the Ohio Casino Control Commission directed the platform to cease offering sports-related event contracts to Ohio residents. A lower court subsequently denied Kalshi’s request for a preliminary injunction. The CFTC, meanwhile, has supported Kalshi’s position, arguing that Ohio’s actions exceed its jurisdictional limits.
Over the past year, Chair Selig has pursued a strategy to assert CFTC jurisdiction over prediction markets by proposing new rules. He has contended that the CFTC possesses a broad statutory mandate, despite objections from various states that argue these platforms violate local gaming and gambling laws, particularly concerning sports-related wagers. The CFTC has engaged in legal challenges against several states in its effort to establish oversight.
This past week, the CFTC also put forth broad proposed rulemaking for prediction markets. While these proposals would generally permit sports betting, they face opposition from state regulators. Regulations concerning bets on terrorism, assassinations, and war would be more restricted under the proposed rules.
Gensler also voiced criticism regarding the CFTC’s capacity to effectively regulate prediction markets. The agency’s funding levels have been a recurring point of discussion. The SEC, the CFTC’s sister agency, operates with substantially more staff. Both former CFTC Chair Rostin Behnam and Brian Quintenz, a previous nominee to lead the agency, have publicly called for increased funding for the CFTC.
In his brief, Gensler argued that the CFTC has not sought funding to regulate sports betting and, in his view, “lacks the experience to do so.”
Potential Regulatory Precedent
The legal dispute involving Gary Gensler’s amicus brief and the CFTC’s asserted jurisdiction over prediction markets holds significant implications for future regulatory frameworks, particularly within the evolving digital asset and financial services landscape. Gensler’s argument that the Dodd-Frank Act does not grant the CFTC authority over sports wagering, directly challenging the current CFTC Chair’s stance, sets a critical precedent for interpreting legislative intent and agency mandates. If Gensler’s position prevails, it could limit the CFTC’s expansive claims and reinforce the principle that regulatory authority must be explicitly granted by Congress. This could lead to a more fragmented regulatory environment where states retain greater control over novel financial products and betting markets, potentially requiring new legislation to address gaps. Conversely, if the CFTC’s position is upheld, it would signal a broader interpretation of existing financial laws and empower the agency to assert greater oversight over markets that blur the lines between traditional finance and speculative activities. This could influence how similar regulatory challenges involving digital assets and emerging financial technologies are addressed globally, including in jurisdictions like the European Union with its Markets in Crypto-Assets (MiCA) regulation, by setting a benchmark for the scope of financial regulatory bodies’ powers.
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