He is now siding with states against a CFTC-blessed market.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, the 2010 law passed after the 2008 financial crisis to regulate swaps and curb risky derivatives, is the statute the case hinges on.
Gensler, who chaired the CFTC from 2009 to 2014 and helped negotiate it, said the law was written to respond to the crash, not to authorize sports wagering.
“I testified in Congress 54 times, and literally Republicans and Democrats alike, nobody said, oh, you know what? Gensler, I think we should give your small agency under President Obama authority to regulate sports betting,” Gensler said.
No one drafting Dodd-Frank, the brief adds, "was attempting to put a curve ball by the Senate Majority Leader to legalize a national sports-betting regime."
The filing invokes the court's warning that Congress does not "hide elephants in mouseholes," contending that preempting a $165-billion-a-year industry would not be tucked into "a subpart of a definition."
"No, no," Gensler said when asked if it was a step forward, contending the agency is trying to reverse a rule the CFTC adopted unanimously around 2011 prohibiting contracts on "assassination, war, terrorism, gaming or unlawful acts."
Citing the CFTC's shrinking workforce and concerns over youth gambling and addiction, Gensler argued that such issues are best handled at the state level, saying, "Let the states do it."
States versus prediction markets"Both of those statutes go far enough back in time to qualify as 'long-extant statutes' for purposes of the MQD," he wrote, invoking the major-questions doctrine, under which courts typically require explicit congressional approval for major expansions of agency authority.
Decrypt has reached out to the CFTC and Kalshi for comment.
