Dodd, Gensler and 145 Tribal Nations Line Up Against the CFTC Over Prediction Markets
The fight over prediction markets has reached the Supreme Court, and almost everyone who helped write the rules is lining up against the federal regulator.
A crowd on the other side
Last week a wave of amicus briefs urged the justices to take up whether sports-based prediction market contracts count as swaps. The filings came from former Senator Chris Dodd, former CFTC and SEC chair Gary Gensler, the National Football League, 39 states plus the District of Columbia, and 145 tribal nations. Most of them want the court to rule that sports-linked prediction markets are gambling products governed by the states, not by Washington.
Dodd-Frank was not a preemption tool
Dodd, whose name sits on the 2010 law at the center of the argument, argued the statute was never meant to let the CFTC override how states regulate gambling. His brief drew a line between derivatives that hedge real risk and parlays that chain wagers across different games, cities and sports — which, in his reading, do not facilitate hedging or price discovery. He also pushed back on the claim that the CFTC's "exclusive jurisdiction" immunizes every listed contract from state and tribal law.
The CFTC wrote its own rules first
The regulator did not wait for the court to act. On Friday it issued an interim final rule that keeps casino-style gambling outside the swap definition, plus a separate proposal that folds event contracts — sports, politics, culture and weather — into existing swaps rules. Chairman Michael Selig called those products commodity derivatives squarely within the agency's exclusive remit. The interim rule takes effect immediately, while the second measure carries a 30-day comment window.
Where the split stands
Three appellate courts have now gone two different ways, with two siding with the states and one with the CFTC. Kalshi was granted an extension to respond, pushing its deadline to Nov. 9. For anyone trading these contracts, the outcome decides whether one federal rulebook covers the whole country or each state writes its own.