Quintenz Endorses Sports Prediction Markets in Confirmation Hearing
On June 10, the U.S. Senate Committee on Agriculture, Nutrition and Forestry held a long-awaited confirmation hearing for Brian Quintenz regarding his nomination as chairman of the Commodity Futures Trading Commission (CFTC). The agency, typically a niche derivatives regulator, has been thrust into the spotlight as prediction markets have proliferated.
Over the course of the hearing, senators grilled the Ohio Republican about the various facets of leading the commission, on which he served from 2017-2021. The breadth of questioning was indicative of just how wide the commission’s scope really is.
Quintenz answered questions about agriculture, ranching, cryptocurrency, financial markets, bipartisanship and event contracts, all of which fit under the CFTC’s purview in some way.
Gaming stakeholders were closely watching Quintenz’s comments regarding prediction markets in particular. The markets, especially since launching sports contracts, have disrupted the states’ rights framework for gaming and have introduced a federally legal sports betting-adjacent product.
In 2021, when Quintenz still served on the CFTC, he publicly dissented from the commission and endorsed sports contracts as legitimate commodities in another case involving the exchange ErisX. He made clear on Tuesday that he still strongly holds that belief.
“I believe that the law is very clear about events that have commercial, financial or economic consequence qualifying as commodities, because the [Commodities Exchange Act] recognizes that therefore, a viable and valuable futures market can be listed upon them and afford people the opportunity for risk management, price discovery and price dissemination,” he said.
The quote came in response to a question about tribal gaming rights from California Sen. Adam Schiff. Since the start of the year, tribes, especially those in California, have been at the forefront of the prediction market debate.
In late May, the CFTC met virtually with tribal leaders to hear their concerns. But current commission Chair Caroline Pham essentially said there was nothing to be done until a new regime is implemented, per InGame.
Quintenz told Schiff that, should he be confirmed, he would have “a very robust, all-stakeholder engagement process around this” and that he “would listen to the concerns of the tribes.” Yet his next comment seemed to indicate that he had no plans to interfere with the current trend.
“Nothing in the CEA that I’m aware of prohibits or affects the opportunity of tribes to offer those products, those markets and those services,” he stated.
Later, Schiff suggested that the Indian Gaming Regulatory Act is not preempted by the CEA, something that Indian law experts have contended. Quintenz notably referred to it in his response as “that other act you mentioned.”
Sports Betting Alliance Adds bet365
A popular nonprofit trade group is expanding by adding a high-level sportsbook operator.
On June 10, the Sports Betting Alliance announced that bet365 will become a member of the coalition, joining other prominent operators FanDuel, DraftKings, BetMGM and Fanatics. The SBA formed in 2021, about three years after the historic PASPA decision.
“Bet365 shares the SBA’s commitment to a regulated, transparent and sustainable U.S. online gaming market. Together, we’ll continue fighting for more states to swap their dangerous and unregulated sports betting and iGaming products for regulated, consumer-protected legal platforms,” said Jeremy Kudon, president of the SBA.
Last year, a YouGov survey reported that U.S. bettors aged 21-34 preferred bet365 as their sportsbook of choice. The U.K.-headquartered bet365 is operational in 13 U.S. jurisdictions.
The SBA has garnered headlines recently for its criticism of a number of states for their tax policy on sports wagering. In particular, the SBA excoriated the Illinois Legislature for passing a last-minute tax increase on sportsbook handle that disproportionately penalizes the largest operators in the market. FanDuel and DraftKings this week announced plans starting in September to impose a $0.50 surcharge on every bet they take in the state.
Last month, The Guardian reported that the Coates family, the owners of bet365, sought advice from a host of U.S. banks on a potential sale of the company. Such a move could have wide-ranging implications across the U.S. sports betting ecosystem.
Louisiana Senate Passes Bill On Sports Betting Tax Hike
A Louisiana bill that aims to raise the tax on sports wagering gross gaming revenues has made it to the desk of Gov. Jeff Landry.
The Louisiana Senate passed a bill on June 8 to increase the rate from 15.5 percent to 21.5 percent, which is slated to bring tens of millions of dollars in additional revenue to state coffers. The bill passed overwhelmingly by a 35-3 vote. As of June 1, the state generated $22.6 million in taxes from sports betting on revenue of about $180 million. Louisiana is among a bevy of states that have considered tax increases on sports betting this year.
Also this week, Churchill Downs Inc. sent a letter to the Louisiana State Racing Commission informing the state that it has initiated plans to relinquish its license for live racing at the Fair Grounds Race & Slots in New Orleans. Churchill is seeking legislative relief to offset the loss in revenue from legislative changes pertaining to historical horse racing.
“This is not the path CDI wishes to proceed down, but the inaction from elected officials to offer any sort of compromise has made this the only possible outcome. … Closing one of the nation’s oldest racetracks, and the most important track in Louisiana, will be a devastating blow to Louisiana’s equine industry and the New Orleans economy,” Churchill Downs CEO Bill Carstanjen wrote in the letter.
Stitt: Tribes Waiting For My Departure To Reintroduce Sports Betting
As expected, the Oklahoma legislative session ended without any resolution to bring sports wagering to the Sooner State.
Negotiations have become so heated between the parties that Gov. Kevin Stitt believes the state’s leading tribal groups will now wait until he leaves office before resubmitting a proposal to legalize sports betting. Stitt vowed to veto any tribal-backed sports betting bill that made it to his desk this year. In light of his position, none of the bills passed during the session.
“We analyzed the 30 or 40 states that actually have sportsbook and put a great plan together,” Stitt said. “We set it out to have more of a free-market approach. As I’ve said before, I think the big casinos, the big bosses, are waiting until I’m out of office. So we’ll see what happens, I guess, in 2027.”
The impasse has deprived bettors statewide of wagering on the Oklahoma City Thunder during the NBA Finals. Rapper Jay-Z placed a $1 million wager at Fanatics (+230) on the Thunder to win in five games. The wager lost June 11 when the Pacers prevailed in Game 3 to take a 2-1 lead in the best-of-7 series.
The 68-win Thunder opened the NBA Finals as heavy -700 favorites to win their first title in franchise history. But Tyrese Haliburton hit a game-winning jumper with 0.3 seconds left in Game 1 and the Pacers received a much-needed lift from Bennedict Mathurin in Game 3. As of June 12, the Thunder had odds of -230 to defeat the Pacers (+190) in the NBA Finals.
