U.S. Sens. John Curtis (R-UT) and Catherine Cortez Masto (D-NV) led Senate colleagues in asking the Commodity Futures Trading Commission (CFTC) to remember sports betting is regulated by states and tribes, not the CFTC.
In a letter to the CFTC acting chair Caroline Pham, the lawmakers said by implicitly allowing some companies to offer sports betting activities as “event contracts,” the CFTC is preventing states and tribal gaming laws from being enforced.
“The CFTC is expressly prohibited from allowing event contracts that involve gaming, are unlawful under federal or state law or are contrary to the public interest,” the Senators wrote. “Despite this prohibition, the CFTC is permitting sportsbook gaming to inappropriately designate themselves as ‘event contracts’ with oversight by the CFTC. For example, some companies are claiming to allow legal sports betting in all fifty states. This action – and the CFTC’s unwillingness to stop it – contradicts both the letter and the intent of the law. The Commission cannot sidestep its statutory obligations by declining to enforce the prohibitions that Congress enacted. Doing so undermines the sovereign authority of states and tribes to regulate gambling within their jurisdictions and risks federalizing an area of law that the Supreme Court has held is reserved to the states.”
The law makers said the CFTC needs to enforce its own regulations, as mandated by Congress, and that by claiming to be federally regulated by the CFTC, issuers of sports event contracts can void myriad state laws, including licensing and background investigations, minimum age requirements, federal anti-money laundering rules and consumers protections.
“The continued availability of illegal sport event contracts in all 50 states further reaffirms the need for the CFTC to enforce its own regulations mandated by Congress,” the senators wrote. “Moreover, by claiming to be federally regulated by the CFTC, issuers of sports event contracts can avoid myriad state laws, including licensing and background investigations, minimum age requirements, federal anti-money laundering rules, and consumer protections such as addiction warnings and integrity monitoring. These rigorous standards are required by state and tribal licensed entities which the CFTC does not have the authority or the capacity to replicate.”
The letter was also signed by U.S. Sens. Ruben Gallego (D-AZ), Alex Padilla (D-CA), Adam Schiff (D-CA), and Elissa Slotkin (D-MI).