Gary Gensler kicks against Trump CFTC’s prediction market oversight push

Gary Gensler, the former chairman of both the SEC and CFTC, has filed an amicus brief with the Sixth Circuit Court of Appeals arguing that federal law does not grant the CFTC authority over sports-related prediction markets. 

Gensler, who needs no introduction to anyone with exposure to the crypto sector during the Biden administration, claims that these contracts are not financial “swaps” but rather a form of sports betting that should be regulated by states, not Washington.

What is Gary Gensler pushing for with prediction markets? 

Gensler, who led the SEC from 2021 to 2025 and the CFTC from 2009 to 2014, filed an amicus brief (a “friend of the court” filing) with the Sixth Circuit Court of Appeals, arguing that Congress never meant for sports betting contracts to be treated as federally regulated “swaps” when it wrote the Dodd-Frank Act. 

Swaps are financial tools used to protect against economic risks, like a farmer hedging against a drop in crop prices. Sports bets, he argues, are rarely, if ever, used for that purpose. 

Gensler oversaw the creation of those swap rules when he led the CFTC, so he is essentially arguing against how his former agency is now interpreting the law.

He also argues that letting the CFTC take over would override the rights of states that have legalized sports betting and collect taxes from it. In the filing, he points out that Harry Reid, the late Senate Majority Leader from Nevada (a state famous for gambling), would never have agreed to a law that hands control of sports betting to Washington, D.C. 

The Indian Gaming Association and several tribal groups filed their own legal brief arguing that sports prediction markets violate tribal sovereignty under the Indian Gaming Regulatory Act. Their reasoning is that any gambling that takes place on Native American land must directly benefit the tribes themselves, not private companies like Kalshi.

The American Gaming Association (AGA)  filed separately, arguing there is no meaningful distinction between sports prediction markets and sports betting. The AGA cited a Kalshi trademark application in which the company described its own services as being associated with the provision of information related to sports betting, including organizing, arranging, and conducting sports betting and gambling tournaments, competitions, and contests.

Better Markets also filed a brief arguing that sports prediction markets should not be classified as swaps.

Where is the fight for sports betting contracts headed?

In April 2026, the Third Circuit, which is pro-CFTC, ruled that New Jersey could not shut down prediction markets. The judges agreed with Kalshi that federal law overrules state gambling bans in this specific case.

In the Sixth Circuit, where Gensler just filed his brief, a federal judge in Ohio ruled against Kalshi in March 2026, allowing the state to move forward with its lawsuit against the prediction market platform.

The Ninth Circuit has appeared more open to siding with states like Nevada, which are trying to block prediction markets. 

Facing this legal patchwork, the CFTC under Chairman Michael Selig has proposed its first formal rules for prediction markets. The agency has also sued multiple states, including Arizona, Illinois, and Minnesota to stop them from banning prediction market platforms. 

Minnesota became the first state to fully criminalize prediction markets in May 2026, when it signed a law that makes operating them a felony. The CFTC sued the state the very next day. 

The total trading volume for prediction markets hit a record of $28.4 billion in May 2026, with platforms like Kalshi holding over $1.5 billion in value. Total value locked across prediction market protocols reached roughly $500 million as of this week, with weekly trading volume near $2.9 billion. The FIFA World Cup has been tipped to reproduce previous successes from big sporting events such as the NFL’s Super Bowl and the Masters. 

The Supreme Court is expected to eventually take up the case, seeing as federal appeals courts are now disagreeing, and both the CFTC and states are refusing to back down.