Dodd, Gensler and the AGA Tell the Supreme Court Dodd-Frank Did Not Make the CFTC a Betting Regulator

The senator whose name is on the 2010 Dodd-Frank Act and the CFTC chairman who implemented it have told the Supreme Court that Congress never moved sports betting from the states to the commodities regulator. The American Gaming Association, 145 tribes and tribal groups and Atlantic City's casinos filed too, and there is still nothing on the docket for Kalshi.

• Former Senator Christopher J. Dodd and former CFTC Chairman Gary Gensler submitted separate amicus briefs on 8 October backing New Jersey's petition in Flaherty v. KalshiEX, No. 26-299, each arguing that sports wagers are not swaps and that Dodd-Frank did not pre-empt state gaming law
• Gensler says he gave technical help drafting the CEA's special rule on event contracts, and that the CFTC he chaired unanimously adopted Rule 40.11, barring gaming contracts, in July 2011
• The American Gaming Association (AGA) says Kalshi's theory, as adopted by the Third Circuit, has thrown the state system "into chaos" and estimates states have lost more than $1.5 billion in potential tax revenue since prediction markets began offering sports bets
• A brief for 130 tribes and 15 tribal organisations calls prediction markets "today's prospectors", and the Casino Association of New Jersey submitted its own on 9 October
• That makes 11 briefs for New Jersey, adding to the states, the Cabazon Band and the NFL; none supports Kalshi, whose response and any supporting briefs are due on 9 November

The Senator and the Regulator Behind Dodd-Frank Say Sports Betting Was Never Part of It

Dodd, a Connecticut senator from 1981 to 2011 who chaired the Senate Banking Committee from 2007, argues that the swap definition requires an event "associated with a potential financial, economic, or commercial consequence", and that a wager's own payout cannot supply it. "Traditional derivatives manage preexisting financial or commercial risks. A sports wager creates a risk that did not previously exist," the brief says. The CFTC's "exclusive jurisdiction" is not an express pre-emption clause, it argues: Congress pre-empted state gaming law only for listed transactions in 7 U.S.C. §16(e)(2), and barred states from regulating swaps as insurance in §16(h), but wrote nothing comparable for gaming.

On the special rule, 7 U.S.C. §7a-2(c)(5)(C), Dodd argues that grouping gaming with terrorism, assassination, war and unlawful activity shows Congress treated it "as a subject for exclusion from derivatives markets, not as a federally authorized product". He cites Senator Blanche Lincoln's July 2010 floor statement that contracts on the Super Bowl, the Kentucky Derby and the Masters "would be used solely for gambling". Under the Third Circuit's reading, he argues, an exchange's own listing decision "may therefore displace state law".

Gensler, CFTC chairman from 2009 to 2014 and SEC chair from 2021 to 2025, writes "as someone who was there". He says sports betting never came up in his 54 appearances before Congress as chairman, that the special rule began as an April 2010 amendment from Senators Harry Reid, Dodd and Lincoln, and that he recalls discussing the inclusion of "gaming" with Reid's office. His plainest argument is political: Reid, a former Nevada Gaming Commission chairman, "would never have consented" to legislation that put sports betting under the CFTC.

Both press a point the Ninth Circuit also relied on: section 2(e) of the CEA bars anyone who is not an eligible contract participant from trading swaps off an exchange, so if sports bets are swaps, Gensler argues, every retail bet placed off-exchange since October 2012, in a casino, on an online sportsbook or "between two friends at a bar", has been illegal. He also quotes Kalshi's own November 2024 brief to the D.C. Circuit, which said contracts on games are "unlikely to serve any 'commercial or hedging interest.'" The briefs share two Zuckerman Spaeder lawyers, Aitan D. Goelman and Ross M. Slaughter; Gensler's counsel of record is Victor Suthammanont of Kostelanetz.

The Industry, the Tribes and Atlantic City Add the Commercial Case

The AGA's brief, filed by Kevin F. King of Covington & Burling, says Kalshi offers "garden-variety sports wagers" and sets a BetMGM parlay beside a matching Kalshi one. It cites $166.94 billion wagered at state-licensed sportsbooks in 2025, $3.71 billion in state tax, and its own estimate of more than $1.5 billion in tax lost to prediction markets. Its counsel says a Kalshi market on Rutgers against Maryland, a game on which betting is illegal in New Jersey, was available in the state on 8 October. Licensed operators bear the cost of licensing, compliance and tax, it argues, and the decision below "has upended those expectations". It asks the Court to take up the Nevada petitions by Crypto.com, No. 26-344, and Robinhood, No. 26-338, as well, and to decide the matter this term.

The tribal brief, with the Native American Rights Fund among its counsel, says Kalshi's argument that one word in Dodd-Frank set aside decades of gaming law is "in one word, absurd". It accepts that no tribe is a party and asks the Court not to let that delay review. The Casino Association of New Jersey says Kalshi told the D.C. Circuit on 17 January 2025 that a Super Bowl contract was not a swap and began offering sports contracts six days later.

Testimony From the Drafters Persuades, but Text Will Decide

The Court gives little weight to what legislators say a statute meant after it passed, which is why both briefs lean on text and the contemporaneous record: §16(e)(2), the insurance carve-out, Lincoln's 2010 statement and the 2011 rule. The §2(e) argument is the hardest for Kalshi to answer, because it requires either accepting that a decade of state-licensed betting was unlawful or explaining why a contract becomes a swap only when an exchange lists it. Its own words to the D.C. Circuit will need an answer too. And recollection is not law: Kalshi can fairly answer that a former official's account of what Congress intended in 2010 does not change what it enacted.

The Briefs Pre-empt the Argument for Waiting

Robinhood has told the Court that review may be premature while the CFTC rewrites its rules, according to Gensler's brief, and the agency has since sent the White House rules to define event contracts as swaps. Gensler says a change to Rule 40.11 "would have no effect on the preemption question presented"; the AGA, citing Loper Bright, says a rule cannot change what "swap" means in the statute. Kalshi has pressed the case for waiting in the Ninth and Fourth Circuits; its opponents have answered it before Kalshi has filed.

The Lineup Is Broad and Still One-Sided

New Jersey now has states, tribes, regulators, lawmakers, a league, the national casino lobby, its own casinos, and the law's Senate sponsor and the regulator who implemented it on its side. The AGA's tax-loss figure is its own estimate, and it speaks for operators that compete with prediction markets. Kalshi and anyone backing it have until 9 November.

The argument against Kalshi has moved from regulators' complaints to the drafting history of Dodd-Frank itself. Kalshi now has to show that the statute's words reach further than the people behind it say they meant.