Prediction market platform Kalshi has spent months arguing that betting on sports outcomes should be treated like trading a financial product. Now, former SEC and CFTC Chairman Gary Gensler has joined a conversation supporting Ohio’s challenge against Kalshi, arguing that Congress never intended federal regulators to take control of America’s $165 billion sports betting industry.
In an amicus brief filed with the Sixth Circuit Court of Appeals, Gensler argued that the Dodd-Frank Act of 2010 was designed to regulate complex financial derivatives after the 2008 financial crisis, not legalize sports betting across the country.
Gensler, who led the Commodity Futures Trading Commission (CFTC) from 2009 to 2014 and later served as SEC chairman, said lawmakers never discussed giving the agency power over sports wagering.
“I testified in Congress 54 times. Nobody said we should give the CFTC authority to regulate sports betting.”
According to him, Congress focused on preventing another financial crisis, not creating a federal framework for sports gambling.
The filing also points to the size of the market at stake. Sports betting has grown into a $165 billion annual industry, making it difficult to believe such authority would be hidden inside a financial reform bill.
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The case began after Kalshi challenged actions taken by Ohio regulators. The platform fought to block states from restricting its sports-related prediction contracts, arguing that the CFTC already oversees the products.
What makes this case important is the money involved. The U.S. sports betting market is estimated to generate around $165 billion annually. States, casinos, tribal gaming operators, sportsbooks, and prediction markets all have a stake in who controls that market.
Backing Ohio alongside Gensler are the Indian Gaming Association, more than 30 Native American tribes, 11 tribal associations, the American Gaming Association, and Better Markets.
Their concern is that if Kalshi wins, state regulators could lose significant control over sports wagering activity.
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At the heart of the lawsuit is a surprisingly simple question, is betting on a sports outcome a financial trade or a wager?
Kalshi argues that event contracts belong in regulated financial markets. While opponents argue that calling a sports bet a financial product does not change what it actually is.
Gensler’s filing even references a famous legal principle that Congress does not “hide elephants in mouseholes,” arguing lawmakers would never quietly transfer authority over sports betting through a technical section of financial legislation.
The battle is becoming one of the most important legal fights facing prediction markets. A loss would strengthen state authority and potentially limit expansion.
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