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Federal oversight of sports event contracts is facing more heat. Gary Gensler said Congress did not build CFTC authority with sports betting in mind, which cuts straight into the legal fight between states and prediction markets.
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Former CFTC chairman Gary Gensler has drawn a clear line between prediction markets and what lawmakers meant to regulate. In comments to Barron’s, he said sports event contracts were never part of the original plan for the agency.
“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.”
That matters because CFTC licensed prediction platforms now offer sports event contracts across all 50 states without state gaming licenses. Those operators keep arguing that federal oversight overrides state law. State regulators are pushing back and have already filed lawsuits in more than a dozen jurisdictions, including New Jersey, Nevada, and Arizona.
The legal tension has grown because sports contracts sit close to a normal sportsbook product even if the format looks different. Users still put money behind outcomes they expect to happen. Prices track probability, and the trade still ends with a win or a loss based on the result.
The broader sports betting market followed a very different route. After the fall of the Professional and Amateur Sports Protection Act in 2018, states gained room to legalize sports betting inside their own borders. Since then, 39 states have passed sports betting laws and launched legal, licensed sportsbooks.
Gensler made clear he does not believe Congress intended federal law to cut around 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 comments hand fresh support to state officials who say prediction platforms are offering unlicensed sports betting under another label. For prediction operators, though, the federal preemption argument remains central as the court fight spreads.