Ex-SEC chair Gensler files brief calling Kalshi's sports-swap argument 'flat wrong'
Former SEC chair Gary Gensler filed a federal court brief late Thursday calling Kalshi's legal argument that sports-betting contracts qualify as swaps under commodities law 'flat wrong.' The filing extends Gensler's public warnings into formal litigation, directly challenging the prediction market platform's position. Gensler rejected Kalshi's framing that Congress approved sports betting markets as financial instruments under the CFTC's purview. The brief adds a high-profile regulatory voice against Kalshi's position as the litigation continues. Kalshi contends its sports event contracts are regulated derivatives, while the CFTC argues they fall under federal swaps authority that preempts state gaming laws. Gensler's intervention comes as the platform fights on multiple legal fronts.
Gensler's brief arms any judge reviewing Kalshi's contracts with a former SEC chair's explicit rejection of its core legal theory. A court that adopts his framing would strip Kalshi of its commodities-law shield and expose its sports markets to state gambling enforcement.
Adds Gensler to the growing collection of regulators and prosecutors formally opposing Kalshi's sports contracts, joining the New Mexico AG's gambling lawsuit and the CFTC's parallel preemption fights in Rhode Island, Minnesota, and other states.