“A Commandeering Battle for the Ages,” iGaming lawyer warns of legal war over CFTC’s push into sports betting
Prominent United States-based iGaming attorney Daniel Wallach (left on the featured image), the founder of Wallach Legal LLC, has predicted a “federal court battle for the ages” over the Commodity Futures Trading Commission’s (CFTC) anticipated move to approve event contracts based on sporting outcomes. This decision could upend the balance of power between federal agencies and state gambling regulators.
In an exclusive conversation with SiGMA News, Wallach connected the dots between former CFTC Commissioner Brian Quintenz’s (right on the featured image) 2021 statements, his later role as a strategic advisor to Kalshi, a prediction market platform, and his recent appointment as CFTC Chair, to suggest that the regulatory deck is being reshuffled in favour of industry interests — and potentially at the expense of constitutional boundaries.
“We are ultimately headed to a court battle over this issue,” Wallach said, “because the CFTC’s anticipated — and seemingly preordained — decision to allow event contracts based on sporting events… would essentially usurp state regulation over gambling, a power which has historically been reserved to the states.”
From derivatives to the gridiron
The controversy stretches back to 2021, when trading platform ErisX sought to list futures contracts based on NFL game outcomes, including point spreads and total scores. While some saw it as an innovative way for sportsbooks and businesses to hedge risk, the CFTC intervened under Rule 40.11, invoking a 90-day review period and eventually pushing ErisX to withdraw its proposal.
Then-Commissioner Brian Quintenz, however, dissented sharply. In a public statement titled “Any Given Sunday in the Futures Market,” he argued that sporting events, like elections and weather, could be considered “commodities” under the Commodity Exchange Act (CEA). He went further, calling the statute unconstitutionally vague and warning that the CFTC was overstepping its authority.
“All events are commodities,” Quintenz said in 2021. “Which means all contracts on future events are commodity futures contracts… and need to be traded on a regulated and registered futures exchange.”
Connecting the dots
Fast forward to 2025, and the pieces are falling into place. Quintenz, who resigned from the CFTC in late 2021 and later joined Kalshi as a strategic advisor, is now back as CFTC Chair. Meanwhile, Kalshi has self-certified its own sports outcome contracts — this time without facing the same 90-day regulatory stay that ErisX did.
To Wallach, this raises questions of consistency, fairness, and legitimacy.
“If you connect all the dots and look to the incoming chair’s past comments,” Wallach explained, “this entire process begins to look less like regulation and more like a preordained outcome designed to benefit select players.”
The Murphy precedent — and the Loper Bright bombshell
At the heart of Wallach’s legal argument is federalism: who gets to decide what constitutes gambling, and who regulates it?
Wallach points to the Supreme Court’s landmark 2018 decision in Murphy v. NCAA, which struck down the federal ban on sports betting and affirmed that states—not federal agencies—retain the right to regulate gambling unless Congress explicitly acts.
“The Supreme Court said, ‘Congress can regulate sports gambling directly. But if it elects not to do so, each state is free to act on its own.’ The emphasis is on Congress, not a regulatory agency like the CFTC,” he said.
What complicates matters further is the Loper Bright Enterprises v. Raimondo ruling in 2024, where the Supreme Court overturned the Chevron doctrine, a 40-year-old precedent that gave federal agencies broad leeway in interpreting ambiguous statutes.
With Chevron gone, courts no longer have to defer to the CFTC’s interpretation of whether football games can be treated as commodities under the CEA.
“The CFTC is highly vulnerable to a federal court challenge under the Administrative Procedure Act,” Wallach argued, “likely initiated by both state and tribal governments who would argue that the CFTC exceeded its statutory authority.”
What comes next
Wallach anticipates that if the CFTC moves forward with greenlighting sports-based event contracts — as now seems likely — it will face immediate legal challenges, potentially from states like New Jersey, which successfully fought and won the Murphy case.
“We’re about to have another commandeering battle for the ages,” Wallach said. “And New Jersey might win this one too. It’s playing out in real time.”
As prediction markets evolve and regulatory lines blur, the legal battle over who controls the future of sports-based derivatives — federal agencies or state governments — is heating up.
For now, the ball is in the CFTC’s court. However, according to Wallach, the federal courts will blow the final whistle.
