Gary Gensler, the man who spent years as one of the most polarizing figures in financial regulation, just weighed in on a fight he no longer officially has a stake in. The former SEC and CFTC chair filed an amicus brief with the US Court of Appeals for the Sixth Circuit on June 11, arguing that federal law does not grant the CFTC authority to regulate sports prediction markets.

His core argument: these contracts are gambling, not commodities, and Congress intended state gaming laws to govern them. Coming from someone who chaired both the CFTC (2009-2014) and the SEC (2021-2025), the brief carries unusual weight, even if Gensler holds no official title anymore.

The Kalshi case at the center of the fight

The brief lands in the middle of an active legal battle involving KalshiEx LLC, the prediction market platform that has been pushing the boundaries of what event contracts can cover. Kalshi began offering sports event contracts in January 2025, a move that immediately put it on a collision course with regulators and the established sports betting industry.

The CFTC has asserted jurisdiction over these contracts, arguing they fall within the agency’s purview as event-based derivatives. A federal district court sided with the CFTC in March 2026, ruling against Kalshi. The platform appealed, and the case now sits before the Sixth Circuit.

The CFTC has not actually taken enforcement action against Kalshi for its sports offerings. The agency claims oversight authority but hasn’t moved to shut the contracts down, creating a strange regulatory limbo where Kalshi operates sports markets while a court simultaneously says it shouldn’t be able to.

Gensler’s amicus brief essentially tells the appeals court that the CFTC is overstepping. In English: he’s saying the agency he once led is claiming power Congress never gave it.

Why a former regulator is siding against regulation

His position is that sports prediction markets are functionally indistinguishable from sports betting, and sports betting has a well-established regulatory framework at the state level. Since the Supreme Court struck down the federal ban on sports gambling in 2018, states have built out licensing regimes, tax structures, and consumer protections for sports wagering. Gensler’s brief argues that layering CFTC oversight on top of that framework contradicts Congressional intent.

He’s not alone in making this case. The American Gaming Association and the Indian Gaming Association have also filed amicus briefs in the Kalshi appeal, both arguing that sports prediction markets should fall under state gaming authority. For the established gambling industry, this is partly about turf. Prediction markets that operate under federal commodity law could sidestep the state licensing requirements and tax obligations that casinos and sportsbooks comply with.

The CFTC has been aggressive on the jurisdictional front beyond just the Kalshi case. In April 2026, the agency filed lawsuits against states including Arizona, Connecticut, and Illinois, further escalating the federal-versus-state tension over who controls these markets. That offensive makes Gensler’s brief all the more pointed: a former CFTC chair publicly arguing the agency is exceeding its mandate while it simultaneously sues states to defend that mandate.

What this means for prediction market investors

The outcome of the Sixth Circuit appeal could define whether platforms like Kalshi can continue operating sports markets under federal commodity law, or whether they’ll need to navigate a patchwork of state gaming regulations instead.

If the CFTC retains authority, platforms get the benefit of a single federal regulatory framework. One set of rules, one license, nationwide access. If Gensler’s view prevails and sports prediction markets get pushed to state-level regulation, platforms would need to obtain gaming licenses state by state, comply with different tax rates, and potentially restrict access in states that haven’t legalized sports betting. That’s the model DraftKings and FanDuel already deal with.

There are still states where sports betting remains illegal or is limited to in-person wagers. A prediction market platform forced into state gaming frameworks would lose access to those populations entirely.