Can the fox be trusted to guard the hen house? According to former Kalshi board member and current Commodity Futures Trading Commission (CFTC) nominee Brian Quintenz, the answer to that question is a resounding “yes”.
Quintenz, who recently testified before the U.S. Senate Committee on Agriculture, Nutrition, and Forestry about the future of prediction trading markets, and potential conflicts of interest concerning his work in that very industry, is not worried about these things at all.
When asked whether or not he would challenge recent court actions against his former industry, the CFTC nominee answered, “The agency would want to ensure that it is appropriately defending the Commodity Exchange Act and the remit that the agency has to regulate and preempt laws, state laws around futures and derivatives markets.” That type of vague answer is likely very concerning to anyone operating a licensed sportsbook that has to compete with unlicensed predictions markets, but that is the world we’re living in.
California Senantor Adam Schiff (D) challenged Quintenz about the similarities between a licensed sports betting operator and a prediction market saying, “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.”
When asked how predictions markets would impact licensed Indian tribes, Quintenz replied with a veiled sales pitch saying, “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.”
Quintenz’s potential nomination, and his unwillingness to budge on the issue of predictions markets, means that regulated sportsbooks could be facing some major competition from unlicensed predictions markets…who have a powerful friend in the only agency that can regulated them.