Former SEC Chair Gary Gensler Rejects CFTC Authority Over Sports Betting
A major legal divide has opened up over the future of prediction markets. Gary Gensler, the former chair of both the SEC and the CFTC, has publicly opposed the CFTC’s current push to regulate sports betting event contracts.
Gensler Files Amicus Brief Against CFTC Jurisdiction
On Thursday, Gary Gensler filed an amicus brief with the U.S. Court of Appeals for the Sixth Circuit. In the brief, Gensler argued that the Dodd-Frank Act does not grant the CFTC authority over sports wagering.
His stance directly contradicts current CFTC Chair Michael Selig and prediction-market platform Kalshi. Both parties claim these contracts fall strictly under federal jurisdiction. Gensler noted that if Dodd-Frank had intended to override state sports betting laws, it would have been a massive news story at the time. However, it was never mentioned.
The Roots of the Legal Battle: Kalshi vs. Ohio
This legal filing stems from an ongoing lawsuit involving Kalshi. In October 2025, Kalshi sued the state of Ohio. The lawsuit followed an order from the Ohio Casino Control Commission demanding the platform stop offering sports-related contracts to state residents.
A judge previously denied Kalshi’s request for a preliminary injunction. Despite this, the CFTC has backed Kalshi in the fight. The federal agency claims that Ohio is overstepping its legal boundaries.
The CFTC's Aggressive Push for Prediction Markets
Over the past year, CFTC Chair Michael Selig has actively tried to claim jurisdiction over prediction markets. The agency has even proposed broad new rules to support sports betting under federal oversight.
However, multiple states are fighting back. State regulators argue that these platforms violate local gaming and gambling laws. In response, the CFTC has launched lawsuits against several states to assert its dominance.
Gensler Highlights CFTC Staffing and Funding Shortages
Beyond legal arguments, Gensler criticized the CFTC’s actual capacity to police sports betting. He pointed out that the agency lacks the experience and the resources to regulate this massive market.
Historically, funding has been a major issue for the CFTC:
- The SEC has six times the number of staff members as the CFTC.
- Multiple past and present officials have publicly called for more CFTC funding.
- Gensler noted that the CFTC never requested specific funding to oversee sports gambling.
This high-profile dispute could ultimately decide whether state governments or federal financial regulators control the booming US prediction markets.
