Former SEC, CFTC Chair Gary Gensler argues that prediction markets don't overrule state regulations
Key takeaways
- The appellate court case arises from a lawsuit that Kalshi preemptively filed against the state of Ohio in an effort to block the state from filing suit against it.
- Gensler was the chair of the CFTC from 2009 to 2014, during which he oversaw the implementation of the Dodd-Frank Act, and chair of the SEC from 2021 to 2025.
- "Congress did not include sports betting contracts within the statutory Dodd-Frank definition of swap," the brief said.
Gensler, the Indian Gaming Association and Native American tribal organizations, the American Gaming Association and Better Markets all filed amicus briefs – otherwise known as friend-of-the-court briefs – with the Sixth Circuit Court of Appeals to argue that prediction market provider KalshiEx (otherwise known as Kalshi)'s sports-related prediction markets violate state gaming regulations.
The appellate court case arises from a lawsuit that Kalshi preemptively filed against the state of Ohio in an effort to block the state from filing suit against it. A federal judge ruled against Kalshi in March.
In Thursday's filing, Gensler outlined the history of derivatives, the Commodity Exchange Act, and the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), arguing that Congress explicitly gave the CFTC authority to oversee specific types of derivatives products. Gensler was the chair of the CFTC from 2009 to 2014, during which he oversaw the implementation of the Dodd-Frank Act, and chair of the SEC from 2021 to 2025.