Gary Gensler Backs States in Prediction Market Regulation Fight
In brief
- Gensler filed amicus brief supporting Ohio's challenge to CFTC prediction market jurisdiction.
- Congressional testimonies cited: 54 instances where neither party suggested CFTC sports betting authority.
- Sixteen states face legal proceedings with prediction market platforms; Minnesota classified operation as felony.
- CFTC sued six states to defend its claimed exclusive jurisdiction over prediction markets.
- President Trump backed the federal position, calling the issue critically important.
A Regulator's Reinterpretation
Gensler's amicus brief backs the State of Ohio against the CFTC's assertion of exclusive jurisdiction over prediction markets. The filing comes as sixteen states face legal proceedings with prediction market platforms, and the CFTC has taken the unusual step of suing six states to defend what it calls its exclusive authority.
Gensler's evidence is personal. He testified before Congress 54 times during his tenure at the CFTC and SEC, and he stated plainly: neither Republicans nor Democrats suggested giving his agency authority to regulate sports betting. His argument hinges on legislative intent — a doctrine that reads statutes in light of what Congress actually knew and intended when voting.
The Dodd-Frank Act, passed in 2010 after the 2008 financial crisis to regulate swaps and curb risky derivatives, became the legal hook the CFTC now uses to claim sports betting falls under its purview. Gensler helped negotiate that very law. His position: the CFTC's new 267-page proposal allowing sports outcome betting misreads the statute entirely.
State Power and Addiction Concerns
Gensler's real argument isn't technical — it's jurisdictional. Citing the CFTC's shrinking workforce and concerns over youth gambling and addiction, he contended that such issues are best handled at the state level rather than federally. His brief filed alongside the Indian Gaming Association, the American Gaming Association, and Better Markets, all supporting Ohio.
The stakes are clear. Minnesota has banned prediction markets outright by making it a felony to operate or advertise one. Meanwhile, thirty Native American tribes and 11 tribal associations filed their own amicus brief backing Ohio, signaling deep tribal interests in preserving state-level control. The Utah Attorney General joined the fight, representing a state where sports betting is outlawed entirely.
Prediction market platform Kalshi was denied a preliminary injunction by federal district court judge Sarah Morrison in its challenge to state cease-and-desist orders, a setback that underscores how fractured the regulatory landscape has become.
The Trump Factor
President Donald Trump has thrown the White House behind the federal side, calling the issue "critically important." That backing may shift momentum in the Sixth Circuit's favor — a reminder that prediction markets remain caught between two competing visions of American federalism, and between agencies and states locked in a high-stakes game over who gets to decide what Americans can bet on.
