PANews reported on June 12 that, according to CoinDesk, former Securities and Exchange Commission (SEC) Chairman Gary Gensler filed an amicus brief with the Sixth Circuit Court of Appeals, arguing that federal law does not grant the CFTC the power to regulate sports-related prediction markets, and that prediction markets should not supersede state gambling regulations. This case stems from a lawsuit filed by Kalshi to prevent a lawsuit in Ohio, which a federal judge dismissed in March.
In its briefing, Gensler pointed out that the Dodd-Frank Act's definition of a swap does not include sports betting contracts, and such contracts do not conform to the purpose of the Commodity Exchange Act. Organizations such as the Indiana Gambling Association also submitted briefs arguing that sports betting markets infringe on tribal sovereignty and claiming that Kalshi's "legal sports betting" app is draining funds from tribal and state government revenue. The American Gambling Association's briefing emphasized that there is no substantial difference between sports betting markets and sports prediction markets. CFTC Chairman Mike Selig argued that any event contracts traded in the CFTC-regulated designated contract markets are swaps. The Supreme Court is likely to ultimately hear this case.
