Gary Gensler, the former chair of both the CFTC and the SEC, filed an amicus brief Thursday with the Sixth Circuit Court of Appeals arguing that sports-event prediction markets are not federally regulated swaps under Dodd-Frank. The brief sides with state regulators against Kalshi, one of the largest prediction-market platforms, in the latest round of the federal-versus-state jurisdiction battle over prediction markets.
Gensler filed the brief in KalshiEX LLC v. Matthew Schuler, a case Kalshi brought in October to block Ohio regulators from enforcing the state's gambling laws against it. Chief Judge Sarah Morrison of the US District Court for the Southern District of Ohio denied Kalshi's request for a preliminary injunction in March, and the company appealed to the Sixth Circuit.
The fight turns on whether sports-event contracts qualify as swaps, which fall under the CFTC's exclusive jurisdiction. If they do, state gambling laws cannot reach them. Courts have split on the question, raising the prospect of Supreme Court review of a market that, by the CFTC's own count, saw trading volume across registered prediction markets exceed $25 billion in 2025.
The filing puts Gensler at odds with the CFTC. The Commission filed its own amicus brief in the same case on May 12, asserting exclusive jurisdiction over prediction markets and arguing that states cannot treat swaps traded on a designated contract market as illegal gambling. Gensler's brief counters that sports-event contracts fall outside the statutory definition of a swap, which he argues centers on hedging economic risk.
