Gary Gensler, the man who spent years as crypto’s most persistent regulatory thorn, is back in the arena. This time he’s not swinging at exchanges or token issuers. He’s taking aim at prediction markets.
The former SEC and CFTC chair filed an amicus brief with the Sixth Circuit Court of Appeals on June 11-12, siding with state gaming regulators in their escalating legal battle against prediction market platforms. His core argument: Congress “categorically” did not intend for the 2010 Dodd-Frank Act to hand the CFTC exclusive federal authority to override state gambling laws when it comes to sports event contracts.
The legal argument, translated
Prediction markets like Kalshi and Polymarket have been operating under the assumption that federal CFTC approval gives them something like a nationwide pass. States disagree, arguing these platforms are effectively running sports betting operations that violate local gambling statutes.
Gensler’s brief lands squarely on the states’ side. He contends that contracts on sporting events don’t meet the statutory definition of “swaps” under Dodd-Frank, and therefore shouldn’t qualify for federal preemption over state law.
