Gensler Argues Dodd-Frank Did Not Authorize Nationwide Sports Wagering
Gary Gensler, former chair of both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), filed an amicus brief late Thursday with the Sixth Circuit Court of Appeals, asserting that Congress did not grant the CFTC authority over nationwide sports wagering when it enacted the Dodd-Frank Act in 2010. Gensler contends that state gaming laws remain in effect.
Tribal Nations and Gaming Associations Support Ohio
Thirty Native American tribes and 11 tribal associations have submitted an amicus curiae brief in support of Ohio in the Sixth Circuit’s appeal concerning prediction markets. This filing comes after federal district judge Sarah Morrison denied Kalshi’s request for a preliminary injunction in its challenge to state cease-and-desist orders. Gaming attorney and prediction market expert Daniel Wallach noted the significance of this broad support for Ohio’s position.
Diverse Coalition Backs State Authority
Gensler’s filing joins a notable group of amici curiae supporting the State of Ohio, including the Indian Gaming Association, the American Gaming Association, and Better Markets. Notably, the Utah Attorney General, representing a state where sports betting is entirely outlawed, was among the co-signers alongside Nevada.
Gensler’s Shift from Crypto Enforcement to State Gaming Support
As SEC chair, Gensler spearheaded an aggressive campaign against the cryptocurrency industry, initiating approximately 100 enforcement actions and characterizing the sector as one “built up around noncompliance.” He is now aligning himself with states in opposition to a market that has received CFTC endorsement.
Dodd-Frank’s Original Intent
The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in 2010 following the 2008 financial crisis to regulate swaps and curb risky derivatives, is central to the current legal dispute. Gensler, who chaired the CFTC from 2009 to 2014 and was involved in its negotiation, stated that the law was designed to address the financial crash, not to authorize sports wagering.
“Millions of people were out of work. Millions of people had lost their homes,” Gensler said in a CNBC interview, referring to legislation focused on credit-default and interest-rate swaps. He recalled his extensive testimony before Congress, emphasizing that no lawmakers suggested granting his agency authority over sports betting.
The brief further argues that no drafters of Dodd-Frank “was attempting to put a curve ball by the Senate Majority Leader to legalize a national sports-betting regime.” The filing invokes the court’s principle that Congress does not “hide elephants in mouseholes,” suggesting that preempting a $165-billion-a-year industry would not be concealed within “a subpart of a definition.”
Opposition to CFTC’s Proposed Rule
Gensler has also voiced opposition to the CFTC’s extensive 267-page proposal, which would permit betting on sports outcomes but prohibit contracts related to war, assassination, and certain injury- or referee-related wagers. When asked if the proposal represented progress, Gensler responded negatively, asserting that the agency is attempting to reverse a rule the CFTC unanimously adopted around 2011 that prohibited contracts on “assassination, war, terrorism, gaming or unlawful acts.”
Citing the CFTC’s reduced workforce and concerns about youth gambling and addiction, Gensler argued that these issues are best managed at the state level, stating, “Let the states do it.”
Federal vs. State Jurisdiction Battle Intensifies
Sixteen states are currently engaged in legal proceedings with prediction market platforms. Minnesota has banned them outright, making it a felony to operate or advertise such services. The CFTC has taken the unusual step of suing six states to defend what it asserts is its exclusive jurisdiction.
President Donald Trump has publicly supported the federal government’s stance, deeming the issue “critically important” and urging regulators to maintain control as states increasingly treat the sector as gambling. The administration has reinforced this position in court, with the CFTC and the Department of Justice jointly suing Minnesota shortly after Governor Tim Walz signed the state’s prediction market ban into law.
Daniel Wallach highlighted that the tribal amici brief underscores the breadth of Kalshi’s legal argument. The company bases its claim of exclusive federal jurisdiction not only on Dodd-Frank but also on the Commodity Futures Modernization Act of 2000 and the CFTC Act of 1974. Wallach noted that these earlier statutes are sufficiently old to qualify as “long-extant statutes” under the major-questions doctrine, which typically requires explicit congressional authorization for significant expansions of agency authority.
Decrypt has reached out to the CFTC and Kalshi for comment.
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