CFTC sues New Mexico over prediction market jurisdiction

Source: Mike Selig “The CFTC has the expertise and responsibility to protect its exclusive jurisdiction over commodity derivatives, and that’s exactly what we’ll continue to do,” he said. The CFTC asked the court to rule that New Mexico state laws that would apply to transactions on CFTC-regulated DCMs are invalid and for a permanent injunction prohibiting the state from taking action against prediction market platforms. Gary Gensler, a former chair of the Securities and Exchange Commission and the CFTC, also weighed in on the CFTC’s legal battle with the states, casting doubt on the federal regulator’s claim that it has authority over sports event contracts. In an amicus brief filed to the Sixth Circuit on Thursday in Kalshi’s fight with Ohio’s authorities, Gensler argued that the Dodd-Frank Act, passed in 2010 in response to the 2008 financial crisis to regulate swaps, was not meant to encompass sports event contracts. Related: CFTC proposes framework favoring sports event contracts over gambling “Congress did not include sports betting contracts within the statutory Dodd-Frank definition of swap,” Gensler argued. He added that sports event contracts do not fit the purpose or language defining a swap under commodities laws, “which focus on hedging economic risk.” Gary Gensler appearing on CNBC to discuss his amicus brief. Source: YouTube “Sports bets are very rarely, if ever, about hedging,” Gensler argued. Gensler told CNBC on Thursday that the question “at the core of this issue is did Congress in 2010 say, ‘No, none of the states can regulate this’ — it's going to this little small agency that I once was proud to run — and the answer is categorically ‘No.’” Magazine: Should users be allowed to bet on war and death in prediction markets? More on the subject