A former Arkansas senator considered sports event contracts to have no commercial value for the U.S. economy before serving as a lobbyist for prediction market giant Kalshi.
Former Sen. Blanche Lincoln filed comments with the Commodity Futures Trading Commission (CFTC) through her lobbying firm Lincoln Policy Group supporting the approval of sports-related event contracts.
Lincoln is supporting prediction markets after being part of the legislative committee behind the Dodd-Frank Wall Street Reform and Consumer Protection Act, a measure enacted in 2010 to identify gaps in regulation that can pose risks to financial stability.
CFTC special rule creates confusion
The Dodd-Frank Act introduced a special rule adopted by the CFTC that prohibits gaming-related contracts. In past comments, Lincoln said the rule was enacted to prevent contracts from enabling gambling, particularly sports wagering. The rule was adopted to prevent access to event contracts that are “contrary to the public interest.”
Lincoln, a lobbyist for Kalshi since last year according to OpenSecrets, filed comments with the CFTC taking a completely different stance on prediction markets compared to her time as a lawmaker.
“Under Dodd-Frank, lawmakers gave the CFTC authority to prohibit contracts, but only if it determines that the contracts have no commercial utility,” said Lincoln Policy Group.
The lobbying firm believes event contracts should be legal given their impact on the economy behind a derivatives market that reportedly has a market size of $60 trillion.
They are also a way to protect businesses from swings in interest rates and prices, according to the letter.
“This is why it is crucial that the CFTC make clear that all prediction markets fall entirely under its domain with no interference by states,” continued the lobbying firm.
Lincoln’s stance as a lawmaker
Lincoln’s comments as a lobbyist differ from her stance as a state legislator when she called for the CFTC to “prevent derivatives contracts that are contrary to the public interest because they exist predominantly to enable gambling through supposed ‘event contracts.'”
At the time, she stated event contracts around sporting events including the Super Bowl and Kentucky Derby had no commercial purpose and would be “used solely for gambling.”
Today, Lincoln believes CFTC-backed event contracts are vital to consumer protection.
“A final point I’ll make is that prohibiting prediction markets would seriously harm U.S. consumers,” said Lincoln in her comments to the CFTC. The lobbyist is concerned by offshore prediction markets acquiring new customers if U.S. exchanges are no longer offering sports contracts.
She also considers sporting events to have the commercial value for event contracts.
“Sporting events like the Super Bowl also have strong commercial value because they have major impacts on advertising, apparel sales and the hospitality industry to name a few,” continued Lincoln in her comments. “Stepping back, these examples further speak to the CFTC’s need to let the markets decide what’s beneficial.”
Kalshi lawyer supports CFTC regulation
Last week, a lawyer from Milbank representing Kalshi voiced his support for event contracts with trading under the CFTC’s authority.
“The line is drawn in Section 2(a)(1), Title Seven in the United States Code. It basically says any swap or futures contract or an option that’s traded on a CFTC-licensed marketplace is subject to the exclusive jurisdiction of the CFTC,” said Milbank Partner Josh Sterling during a panel at the National Council of Legislators from Gaming States summer meeting.
Since 2024, Kalshi has spent more than $700,000 on total lobbying expenditures, according to political data organization OpenSecrets.
