US Senate vote on Quintenz’s CFTC confirmation is delayed without official explanation

A US Senate committee unexpectedly delayed a vote on the nomination of Brian Quintenz as the chairman of the Commodity Futures Trading Commission on Monday, providing another twist in the drama surrounding the federal government’s role in regulating prediction markets.

The US Senate Committee on Agriculture, Nutrition and Forestry had listed Quintenz on its website earlier Monday as one of four nominees from US President Donald Trump who were scheduled for a vote. The committee abruptly pulled Quintenz from the list later in the day, according to a congressional staffer who told iGB they were not authorised to provide additional detail explaining the delay.

Sources told iGB afterward that the delay apparently stemmed from flight trouble by Mississippi Senator Cindy Hyde-Smith, a Republican. Without Hyde-Smith present, Republicans may have lacked the votes needed to advance the nomination. The committee is now expected to hold a business meeting to advance the nomination for Quintenz to the Senate floor before the August recess.

The delay is the latest wrinkle in arguably the most contentious issue to impact the sports wagering industry since the historic PASPA decision. There has been ongoing controversy and litigation over the entrance of the prediction markets overseen by the federal CFTC into the sports betting space, which has been overseen by regulators in dozens of states since 2018. 

A public affront on tribal sovereignty?

Quintenz, an Ohio Republican, is a former CFTC commissioner who left the post in August 2021 after serving a five-year term. Trump now wants him to lead the agency.

Quintenz appeared before the committee last month for his confirmation hearing. There, two Democratic senators — Adam Schiff of California and Corey Booker of New Jersey — pressed him on the possibility of federal overreach when it came to the regulation of sports event contracts. The contracts, which possess characteristics of a financial instrument (i.e. an oil or wheat futures trade), give individuals the ability to invest on a sports outcome.

Schiff asked Quintenz directly if the CFTC should prohibit the contracts if it is determined that the derivatives violate tribal sovereignty.

The issue has particular relevance for the California senator since his state contains more than 100 federally recognised tribes, many of them with casinos. Major California tribes such as the Pechanga Band of Indians in Riverside County derive a sizable amount of revenue each year from gaming.

Quintenz: A clear explanation on derivatives, price discovery

In response, Quintenz noted that the CFTC has an obligation to abide by the Commodity Exchange Act, a 1936 law that regulates commodity trading nationwide. Quintenz stated further that he believes the CEA is “very clear” about the purpose of derivatives markets, risk management and price discovery. Event contracts, in his view, “can serve a function” in that mandate.

The topic generated a fiery debate this month at the National Council of Legislators From Gaming States Summer Meeting in Louisville. Michael Hoenig, an attorney for the Yuhaaviatam of San Manuel Nation, argued that the contracts are a “profound affront” to tribal sovereignty, in part because they are practically the same as wagers on sports.

Josh Sterling, an attorney who has represented Kalshi in federal court, retorted that while the activities are enumerated in the act, the contracts are not explicitly illegal.

In addition, Sterling indicated that the activities are subject to review if the CFTC determines that the contracts are contrary to the public interest. Following the panel, Sterling told iGB that he has high regard for Quintenz and his handling of policy matters on prediction markets.

Meaningful clarity on sports event contracts

Last week, a group of national, state and tribal organisations submitted a letter to the top senators on the agriculture committee, Republican John Boozman and Democrat Amy Klobuchar, urging that the vote on Quintenz be delayed. The group, which includes the American Gaming Association, asserts that Quintenz failed to provide “meaningful clarity” on questions raised by the committee surrounding sports event contracts.

Numerous states, sovereign tribes, sports leagues, responsible gaming advocates and gaming industry stakeholders have expressed concern to the CFTC about the contracts, they wrote. Though the group claimed that numerous arguments have spelled out why the contracts violate state and federal law, the CFTC has not conducted a review on the financial instruments, according to the letter.

Separately, AGA President Bill Miller wrote an op-ed in the Kansas City Star earlier this month on why the association believes that the regulation of sports event contracts should be left to the states. Miller reiterated his position that sports event contracts by Kalshi and others share many of the same properties as wagers offered by traditional sportsbook operators, underscoring why the derivatives should be regulated on the state level.

“If you wager money on whether the Chiefs will win on any given Sunday, that’s a bet,” Miller wrote. “Whether you call it a derivative or an event contract, the intent and effect are the same.”

A CFTC spokesman did not immediately respond to a request from iGB for comment.

 A Senate committee decided not to vote Monday on President Trump’s nominee to be the next Commodity Futures Trading Commission chairman.