Gambling Interests Urge Senators to Question CFTC Nominee On Prediction Markets
Tribes, American Gaming Association, National Council on Problem Gambling, and others want a Senate committee to press Brian Quintenz on the rise of sports betting via platforms like Kalshi
A group of prominent interests from the gambling industry has expressed their concerns about prediction markets and the nominee to head the Commodity Futures Trading Commission in a letter to a Senate committee.
Concerns about how CFTC nominee Brian Quintenz would handle sports betting via prediction markets appeared in a letter sent to members of the Senate Committee on Agriculture, Nutrition and Forestry obtained by The Event Horizon. Signees include various tribal gambling interests, the American Gaming Association and the National Council on Problem Gambling.
The Senate Agriculture Committee held a confirmation hearing for Quintenz last month. He is still awaiting a vote from that committee and the full Senate to be confirmed as the new chairman of the CFTC.
Sports betting via prediction markets has exploded since the start of the year. Kalshi recently announced that it has surpassed $2 billion in trading volume on sports markets that are typically reserved for state-regulated sportsbooks. Quintenz remains a Kalshi board member until confirmation, at which point he said he would step down from that role.
From the letter:
“We write today with concerns regarding the nomination of Brian Quintenz to Chair the Commodity Futures Trading Commission (CFTC). During his confirmation hearing before the Committee on June 10, Mr. Quintenz failed to provide meaningful clarity on the controversial issue of sports event contracts in response to questions by members of the Committee. We respectfully request that the Committee require the nominee to fully address the concerns raised at the hearing and commit to upholding and enforcing applicable CFTC regulations before moving forward with his nomination.”
The letter does not state opposition to Quintenz as the CFTC pick. But it does ”urge the Committee not to advance Mr. Quintenz’s nomination until he has committed to initiate a CFTC review of these contracts if he is confirmed.”
The letter’s signees include a number of organizations that have opposed the rise of sports betting via prediction markets, either via public statements or filings in three lawsuits between Kalshi and state regulators. Here’s who signed on to the letter:
The American Gaming Association
The National Council on Problem Gambling (The NCPG hasn’t outright opposed prediction markets, it’s advocating for stricter regulations, which are not likely to come from the CFTC.)
The Indian Gaming Association
The National Congress of American Indians
The Arizona Indian Gaming Association
The California Nations Indian Gaming Association
The Casino Association of Indiana
The Casino Association of New Jersey
The Nevada Resort Association
The Oklahoma Indian Gaming Association
The Tribal Alliance of Sovereign Indian Nations
The Washington Indian Gaming Association
Seventeen tribes
Some of those groups were also invited to the CFTC roundtable on prediction markets that never happened.
The letter was sent to the chairman of the committee, Sen. John Boozman, and its ranking member, Sen. Amy Klobuchar. It was also copied to all members of the committee.
More from the text of the letter:
“As you know, starting in December of 2024, several CFTC registered prediction platforms have self-certified futures contracts on sporting events. These platforms have expanded their offerings in contravention of the CFTC’s own regulations – adopted pursuant to the Commodity Exchange Act (CEA) – which prohibit event contracts regarding terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law.
Numerous states, sovereign Indian tribes, sports leagues, responsible gaming advocates and gaming industry stakeholders have conveyed their strong concerns to the CFTC about these contracts. The vast majority believe sports event contracts are tantamount to sports wagering and, therefore, constitute gaming. Many also argue that these contracts violate laws in several states and federal statutes – including the Indian Gaming Regulatory Act, the Wire Act and others. The CFTC has not executed a review of these contracts or taken any action despite existing regulations requiring the agency to prohibit any contracts that fall under the enumerated categories.
At the hearing Mr. Quintenz indicated he would follow his own interpretation of the CEA with regard to event contracts, side-stepped the applicability of current regulatory prohibitions, and would not commit to reviewing sports event contracts. Since the hearing, even more questions have been raised about the legality of these contracts. In a case pending before the Federal Third Circuit Court of Appeals, 34 state Attorneys General plus those from the District of Columbia and the Northern Mariana Islands, signed a brief arguing that the CEA does not preempt their state authority to regulate gaming. Moreover, this bipartisan, regionally diverse group of signatories corresponds with 14 home states of members of this Committee including the Chair and Ranking Member. Supporting amicus briefs were also filed by the gaming industry and tribal organizations.
The lack of action by the CFTC means prediction platforms will continue to offer these sports contracts without the important regulatory guardrails provided by state and tribal regulated sports betting. Instead of using his confirmation hearing to provide clarity on this issue, Mr. Quintenz implied that if he is confirmed the CFTC will continue to do nothing to address gaming contracts. It should be deeply troubling to this Committee that he offered no assurances that the CFTC under his leadership would enforce its own regulations. This is even more concerning based on the fact that Mr. Quintenz is poised to not only become the CFTC Chair but could also be the sole commissioner based on current vacancies and planned departures. With no requirement for a quorum, it is imperative that the Chair enforce the rules.
Therefore, we urge the Committee not to advance Mr. Quintenz’s nomination until he has committed to initiate a CFTC review of these contracts if he is confirmed. We appreciate the Committee’s attention and its dedication to upholding the mission of the CFTC.