The American Gaming Association (AGA) and numerous tribal and other gaming associations have written to the Senate Committee on Agriculture, Nutrition and Forestry to urge the government not to allow Kalshi board member Brian Quintenz to oversee federal regulation of event contracts without certain assurances.
In a joint letter viewed by SBC Americas that is dated July 16 and signed by a dozen organizations and 17 tribes, the AGA, the Indian Gaming Association (IGA), the National Congress of American Indians (NCAI) and the National Council of Problem Gambling (NCPG) implored the Senate committee’s chair to be more diligent in his scrutiny of Quintenz.
Quintenz, whose nomination as Commodity Futures Trading Commission (CFTC) chair still needs to be confirmed by Congress, is a former advisor for Crypto.com from 2021 to 2022 and has been on the board of Kalshi since 2021. Both of those companies now offer a slate of sports event contracts.
Quintenz wrote to the CFTC’s Office of the General Counsel in May to state that he intends to resign from Kalshi’s board if and when he is confirmed as the new CFTC chair. He also vowed to divest or forfeit all stock options that he holds in Kalshi, as well as not to recuse himself from any matter involving Kalshi for one year after his resignation.
Breaking your own rules?
The authors of the letter reiterated their belief that, by offering what supposedly amounts to unlicensed sports betting, prediction markets violate laws such as the Indian Gaming Regulatory Act and the Wire Act.
The organizations added that sports event contracts also contravene the CFTC’s own regulations, “which prohibit event contracts regarding terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law.”
Hearing did not cut through noise
Quintenz was quizzed at a hearing of the Agriculture, Nutrition, and Forestry Committee on June 10. He stated that he believes “the law is very clear about the purpose of derivative contracts,” pointing to the Commodity Exchange Act (CEA). He also suggested that there is nothing stopping tribal operators from seeking CFTC approval to offer their own versions of these markets if they so wish.
However, the authors of the letter argued that Quintenz “failed to provide meaningful clarity” on the issue of sports event contracts during that hearing.
“Mr. Quintenz indicated he would follow his own interpretation of the CEA with regard to event contracts, side-stepped the applicability of current regulatory prohibitions, and would not commit to reviewing sports event contracts,” they wrote. “We respectfully request that the Committee require the nominee to fully address the concerns raised at the hearing and commit to upholding and enforcing applicable CFTC regulations before moving forward with his nomination.”
Wake up and smell the coffee
The signatories added that the CFTC has failed to undertake a review of sports events contracts or take any meaningful action, “despite existing regulations requiring the agency to prohibit any contracts that fall under the enumerated categories.”
“The lack of action by the CFTC means prediction platforms will continue to offer these sports contracts without the important regulatory guardrails provided by state and tribal regulated sports betting. Instead of using his confirmation hearing to provide clarity on this issue, Mr. Quintenz implied that if he is confirmed the CFTC will continue to do nothing to address gaming contracts.
“It should be deeply troubling to this Committee that he offered no assurances that the CFTC under his leadership would enforce its own regulations.”
Who will guard the guards?
Finally, the writers of the letter also referenced the fact that, as of right now, the CFTC’s leadership is paper-thin.
The CFTC is supposed to be made up of five commissioners. Since Trump took office, two commissioners have left and two others, including acting Chair Caroline Pham, have said they will leave before the end of the year.
The new letter noted that the concerns are deepened by the fact that “Mr. Quintenz is poised to not only become the CFTC Chair but could also be the sole commissioner based on current vacancies and planned departures.”
“With no requirement for a quorum, it is imperative that the Chair enforce the rules,” the letter concluded. “Therefore, we urge the Committee not to advance Mr. Quintenz’s nomination until he has committed to initiate a CFTC review of these contracts if he is confirmed.”
As well as the AGA, the IGA, the NCAI and the NCPG, the July 16 letter is co-authored by:
- Arizona Indian Gaming Association (AIGA)
- California Nations Indian Gaming Association (CNIGA)
- Casino Association of Indiana (CAI)
- Casino Association of New Jersey (CANJ)
- Nevada Resort Association (NRA)
- Oklahoma Indian Gaming Association (OIGA)
- Tribal Alliance of Sovereign Indian Nations (TASIN)
- Washington Indian Gaming Association (WIGA)
- 17 individual tribes, mostly from California
