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Read Full BioIt appears that Kalshi’s recent lobbying efforts are paying off as former Sen. Blanche Lincoln has written to the Commodity Futures Trading Commission (CFTC) expressing her support for the expansion of prediction markets into sports.
The Lincoln Policy Group, founded by Sen. Lincoln, received $180,000 in payments from Kalshi, and Lincoln registered as a lobbyist for Kalshi last year.
Lincoln’s letter to the CFTC supports the argument Kalshi has frequently made in court cases against state regulators, that prediction markets are governed at the federal level and beyond state control.
“It is crucial that the CFTC make clear that all prediction markets fall entirely under its domain with no interference by states,” Lincoln wrote in the letter.
“If a formal rule is necessary to achieve this goal, then the agency should not hesitate to act.”
Lincoln Implores CFTC to Let Markets Decide
After a change in administration, the CFTC has softened its stance towards the expansion of prediction markets into political and sports markets.
Incoming Chair Brian Quintenz, a board member at Kalshi, indicated his openness to further expansion at a Senate hearing last month, despite opposition from state regulators and tribal groups.
In a court case against Kalshi in New Jersey, 34 states, as well as over 60 tribal groups, and the American Gaming Association (AGA), all submitted briefs against sports prediction markets.
The case is ongoing, as are legal battles in Nevada and Maryland, but Kalshi has so far secured favorable rulings from judges, allowing its markets to be offered in all 50 states.
Lincoln believes that the CFTC should not cave to increasing pressure from states and tribes, among others.
“Not surprisingly, the CFTC faces a lot of pressure right now to ban prediction markets, especially contracts tied to political elections or sporting events,” she wrote.
“This would be a grave mistake for a number of reasons, and it would fly in the face of the agency’s long-standing policy of letting the markets decide.“
Lincoln Letter Contradicts Previous Comments
As highlighted by InGame, Sen. Lincoln’s recent letter to the CFTC stating support for sports prediction markets is in contrast to previous comments.
During a 2010 Senate conversation, Lincoln said: “It would be quite easy to construct an ‘event contract’ around sporting events such as the Super Bowl, the Kentucky Derby, and Masters Golf Tournament. These types of contracts would not serve any real commercial purpose. Rather, they would be used solely for gambling.”
These words have been used in briefs filed against Kalshi in its legal fight in Maryland. However, in the letter, Lincoln writes a direct contradiction, stating that she now believes the Super Bowl does have a real commercial purpose.
From the letter, Lincoln states, “Sporting events like the Super Bowl also have strong commercial value because they have major impacts on advertising, apparel sales and the hospitality industry to name a few.”
The change in stance from Lincoln may well indicate that Kalshi’s lobbying efforts are paying off. According to Dustin Gouker at the Next Event Horizon, the company has spent $1 million on federal lobbying over the past five years.
