Other prediction markets critics included the guy who ran the CFTC when Dodd-Frank was implemented, Gensler. The ex-regulator (who also ran afoul of the crypto industry when he later led the Securities and Exchange Commission) contradicted the CFTC’s current chairman, Mike Selig, to argue there was never an intention to override state gambling laws.
“Congress did not transfer jurisdiction over sports betting from the states to the CFTC,” Gensler wrote in his brief. “When Congress amended the [Commodity Exchange Act] through Dodd-Frank, it was addressing the causes of the recent financial crisis, not undoing federal policy against sports betting and displacing traditional state and tribal regulation.”
The NFL’s brief insisted that the CFTC isn’t currently holding Kalshi and other companies to standards as tough as the states. The federally regulated firms “are not subject to the same rigorous regulatory constructs and oversight provided by state gaming authorities.” Since the onset of state-regulated betting on football, the league said its top priority “has been preserving the integrity of its games and protecting its fans as legal sports betting spread state by state”
The league argues that the CFTC oversight is failing on several key points: It’s allowing wagering that can be manipulated by the choices of single players; it’s letting people younger than 21 bet; and the federal agency doesn’t have enough staff to police the markets as well as the states.
