Former CFTC and SEC chairman Gary Gensler is filing an amicus brief arguing that U.S. states, not the federal government, should regulate sports betting.
The move signals a potential shift in how federal authorities view the intersection of financial derivatives and gaming. If the court accepts this argument, it could limit the Commodity Futures Trading Commission's ability to oversee sports-event contracts nationwide.
Speaking during an interview on CNBC’s “Squawk Box,” Gensler said the CFTC was never meant to regulate sports betting [1]. He said that the intent of Congress was to leave the regulation of such activities to individual states [2].
Gensler based his position on the Dodd-Frank Act, which was passed in 2010 [3]. He said that the act defined swaps but did not include sports-event contracts [2]. According to Gensler, the two are different models [4].
“Betting on sports is gaming,” Gensler said [5].
This position creates a notable tension with other federal actions. While Gensler argues against nationwide oversight, the CFTC has previously engaged in legal action regarding sports-betting lawsuits targeting major prediction markets [6].
Gensler continues to maintain that the federal agency lacks the mandate to act as a primary regulator for the gaming industry. He said the distinction between financial swaps and sports bets is fundamental to how the law should be applied [2].
““The CFTC was never meant to regulate sports betting.””
This legal intervention by a former head of two major regulatory bodies suggests a push toward a decentralized regulatory framework for sports betting. By distinguishing between financial swaps and gaming, Gensler is attempting to carve out a legal boundary that prevents federal overreach into state-level gaming jurisdictions, though existing CFTC litigation suggests the agency's internal stance may be conflicted.
