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The nominee to become chairman of the Commodity Futures Trading Commission (CFTC) has backed prior statements he made that would support the ability of prediction markets to offer sports-event contracts.
Brian Quintenz, who was nominated by President Donald Trump to become chairman of the federal regulator that oversees commodities markets, appeared before the U.S. Senate Committee on Agriculture, Nutrition and Forestry for his confirmation hearing on Tuesday (June 10).
Quintenz, who previously served on the commission from 2017 to 2021, was asked by multiple senators on the committee about the expansion of prediction markets to include sports-event contracts.
In prior comments when serving on the commission, Quintenz had dissented from previous CFTC policy and pushed a wider view of what would be considered permissible events to offer contracts on, including sporting events.
When questioned, Quintenz stood by that position.
“I think this is an area of the marketplace that the agency used flexibility that it found in the statute in a way that hampered its growth,” he said Tuesday.
“I believe that the law is very clear about events that have commercial or financial or economic consequence qualifying as commodities, because the act recognizes that therefore a viable and valuable futures market can be listed upon them and afford people the opportunity for risk management, price discovery and price dissemination, which are the three cited national interests for the Commodity Exchange Act.”
Quintenz was also asked about the so-called “special rule” of the act, which prohibits contracts on events such as terrorism, war and “gaming” if they are against the public interest, and whether sports-event contracts would violate that rule.
“That provision of the statute troubles me in terms of trying to execute it with repeatability and legality,” Quintenz said.
He added that it was made additionally complicated by a 2024 Supreme Court decision that overturned past legal precedent called “Chevron deference,” which previously directed courts to defer to a federal agency’s reasonable interpretation of a statute if a federal law is ambiguous.
“There is no framework that was provided for by Congress in terms of how to execute that appropriately [or] what constitutes the public interest,” Quintenz said.
California Senator Adam Schiff cited his concern that contracts based on sporting events conflict with federal law governing tribal gaming.
“I'm very concerned that these event contracts, which seem pretty indistinguishable at least from the consumer point of view from gaming, violate tribal sovereignty, undermine state and tribal gaming compacts and conflict with the Indian Gaming Regulation Act,” Schiff said during his questioning of Quintenz. “Federal law dictates that the tribes, not CFTC have exclusive rights to police gaming within their territory.”
Schiff asked Quintenz if he would stop the contracts if they were found to they were determined to be illegal gaming.
“In my view, if betting on the outcome of a sporting event looks like sports betting, looks like gaming, smells like gaming, sounds like gaming, there are winners and losers like gaming, it's probably gaming,” the senator said.
“I believe that I need to abide by the Commodity Exchange Act, and if there is a conflict between the Commodity Exchange Act and the other act you mentioned (IGRA), I believe that's best resolved through Congress,” Quintenz said in response. “I believe the Commodity Exchange Act is very clear about the purpose of derivatives markets, the purpose of risk management and price discovery, and that events can serve a function in that mandate.”
Quintenz did pledge to welcome "a robust stakeholder engagement process" on the topic, including a promise to reschedule the CFTC roundtable discussion on prediction markets that was scheduled to take place in late April but was cancelled.
“I would listen to the concerns of the tribes you mentioned,” he said. “Nothing in the CEA that I’m aware of prohibits or affects the opportunity of tribes to offer those products and those markets and those services.”
New Jersey Senator Cory Booker voiced his concerns over “the explosion in advertising for sports betting, some of the addictive-by-design tactics employed by the industry that’s ultimately the law of the land.”
He also cited advertising by Kalshi that promises legal sports betting in all 50 states, and also expressed concerns about the role of Trump’s son, Donald Trump Jr, as a “strategic advisor” to the company.
“I'm worried that you're going to be in a position where, if Chairman, are you going to feel empowered to prosecute a company or push back on a company that's being advised by the president's son,” Booker said.
Quintenz himself is a member of Kalshi’s board, and previously pledged to recuse himself from any matters involving Kalshi for a year after his resignation, and to divest any stock and unvested stock options within 90 days of his confirmation.
Multiple senators acknowledged Tuesday that Quintenz is expected to be confirmed as chairman. At least three additional seats will remain open on the commission, as four of the five members of the commission have either resigned or announced their intention to do so.
Nevada Congresswoman Dina Titus, who has been one of the most active federal legislators on the subject of prediction market expansion, called on the Senate to reject Quintenz's nomination.
“His testimony illustrates how dangerous his appointment would be, including how he plans to transform this important agency into a rubber stamp for unregulated, illegal sports betting,” she said in a statement, also citing his conflict of interest as a Kalshi board member.
