- CFTC nominee Quintenz appeared earlier than Senate Ag Committee
- Adam Schiff of California pressed nominee on his views on sports activities occasion contracts probably violating tribal sovereignty, state gaming compacts with Indian Nation
Brian Quintenz, President Trump’s choose to guide the Commodities Futures Buying and selling Fee (CFTC), appeared earlier than the Senate Agriculture Committee on Tuesday, fielding questions on a wide range of subjects, together with the intersection of burgeoning prediction markets trade and sports activities betting.
Sen. Adam Schiff (D-CA) questioned CFTC nominee Brian Quintenz about sports activities occasion contracts. (Picture: Schiff for Senate)
Sen. Adam Schiff (D-CA), who represents among the largest tribal on line casino operators within the US, requested Quintenz, previously a board member of prediction market behemoth Kalshi, about attainable plans to make use of the CFTC’s regulatory authority to guage whether or not event-linked derivatives are threatening tribal sovereignty and undermining the Indian Gaming Regulatory Act (IGRA).
I’m very involved that these occasion contracts, which appear fairly indistinguishable, no less than from the buyer viewpoint, from gaming violate tribal sovereignty, undermine state and tribal gaming compacts in battle with the IGRA,” mentioned Schiff in his remarks.
Quintenz mentioned he believes the legislation, on this case the Commodities Change Act (CEA), is “very clear” concerning occasions that “have business, monetary, or financial consequence.” If these requirements are met, the CEA would classify the contracts in query as viable commodities on which futures contracts might be listed.
For California Tribes, Schiff’s Considerations Warranted
A number of California tribal on line casino operators, together with the Agua Caliente Band of Cahuilla Indians, donated a whole bunch of hundreds of {dollars} to Schiff’s 2024 senate marketing campaign and their investments could show shrewd as a result of his cordial questioning of Quintenz holds advantage because it pertains to the Golden State.
One of many largest causes prediction market operators have garnered scrutiny is as a result of they’re leveraging their regulation by the CFTC — a federal company — to supply sports activities occasion contracts in all 50 states with out procuring gaming licenses in these jurisdictions.
In California, the place Schiff by his estimation represents greater than 100 tribal nations, the state of affairs is even stickier as a result of no type of sports activities wagering is permitted within the state and tribal gaming operators maintain rights of exclusivity there. Which means they management issues of gaming enlargement, be it sports activities wagering or iGaming. A number of business sportsbooks supported a 2022 poll proposal to carry on-line sports activities betting to California with out consulting tribes. The outcomes have been disastrous and people operators are scrambling to restore their relationships with the tribes.
Quintenz informed Schiff mentioned he’d take heed to the issues of the tribes, noting that these operators can supply occasion contracts ought to they select to take action. The CFTC nominee added he’s open to “strong” dialogue with all involved stakeholders because it pertains to the intersection of occasion contracts and tribal gaming.
If it Walks Like a Duck…
Particular to Kalshi, that firm has perturbed some state gaming regulators as a result of it’s gone backwards and forwards on whether or not or not its sports activities occasion contracts represent sports activities wagering within the conventional sense. The corporate and its rivals supply sure/no derivatives on video games, that are arguably akin to moneyline bets.
Utilizing an alteration of “if what walks like a duck and quacks like a duck …,” Schiff made his view clear and that prediction markets are providing a type of sports activities wagering to clients and that represents a possible risk to tribal on line casino operators which have agreements in place with their respective states.
“If betting on the end result of a sporting occasion appears to be like like sports activities betting, appears to be like like gaming, smells like gaming, feels like gaming, there are winners and losers like gaming, it’s in all probability gaming,” mentioned the California Democrat.
