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(AsiaGameHub) – Federal supervision of sports event contracts is coming under increased scrutiny. Gary Gensler stated that Congress did not design the CFTC’s authority with sports betting in mind, a point that directly intersects with the legal battle between states and prediction markets.
Good to Know
- Gary Gensler has stated that sports event contracts qualify as sports betting.
- He noted that Congress never intended CFTC oversight to extend to this domain.
- State regulators have already filed lawsuits against prediction platforms in over a dozen jurisdictions.
Gary Gensler: Sports Contracts Were Never the CFTC’s Focus
Former CFTC Chair Gary Gensler has established a distinct line between prediction markets and the areas lawmakers intended to regulate. In comments to Barron’s, he said sports event contracts were never part of the agency’s original mandate.
“I never once ever heard a member of Congress or their staffs suggest that the law they were writing, acting upon, and voting on was for our little agency, the CFTC, to have oversight over sports betting,” Gensler, who served as CFTC chair from 2009-14 and 2021-25, told Barron’s. “Betting on sports is gaming.”
This is significant because CFTC-licensed prediction platforms currently offer sports event contracts across all 50 states without state gaming licenses. These operators consistently argue that federal oversight takes precedence over state law. State regulators are pushing back and have already initiated legal action in over a dozen jurisdictions, including New Jersey, Nevada, and Arizona.
Legal tensions have escalated because sports contracts are functionally similar to standard sportsbook products even if their format appears different. Users still wager money on outcomes they expect to occur; prices reflect probability, and each transaction ends with a win or loss based on the final result.
State Sports Betting Regulation Followed a Separate Trajectory
The broader sports betting market took a distinct path. After the repeal of the Professional and Amateur Sports Protection Act in 2018, states gained the authority to legalize sports betting within their borders. Since then, 39 states have enacted sports betting laws and launched legal, licensed sportsbooks.
Gensler emphasized that he does not believe Congress intended federal law to bypass state gaming regulators.
“Nobody was intending to pre-empt the New Jersey state gaming commission,” Gensler said. “It was politically not discussed, and if it had been, it would have been dead in Congress. Senators wouldn’t have voted for it.”
Gensler’s remarks provide fresh support to state officials who claim prediction platforms are offering unlicensed sports betting under an alternative label. For prediction operators, however, the federal preemption argument remains central as the legal fight expands.
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