Caroline Pham, Acting Chairperson Commodity Futures Trading Commission Page 9 of 13
(VI) other similar activity determined by the [CFTC], by rule or regulation, to be contrary to the public interest.
(ii) Prohibition No agreement, contract, or transaction determined by the Commission to be contrary to the public interest under clause (i) may be listed or made available for clearing or trading on or through a registered entity. 7 U.S.C. § 7a-2(c)(5)(C). Thus, Congress clearly intended to prohibit any event contract involving gaming as contrary to the public interest. The CFTC’s implementing regulations, in turn, make the categorical determination that event contracts involving gaming are contrary to the public interest. 8 See 75 Fed. Reg. 67282, 67288–89 (Nov. 2, 2010) (explaining that CFTC was enacting § 40.11(a)(1) “[p]ursuant to [the authority granted in 7 U.S.C. § 7a-2(c)(5)(C]” to determine whether certain contracts are contrary to the public interest); 76 Fed. Reg. 44776, 44786 (July 27, 2011) (same). As such, the CFTC’s implementing regulations also expressly prohibit event contracts involving “gaming” from being listed for trading or accepted for clearing on or through a registered entity. Specifically, 17 C.F.R. § 40.11(a)(1) provides, in relevant part: Prohibition. A registered entity shall not list for trading or accept for clearing on or through the registered entity any of the following: 8 On March 25, 2021, Commissioner Quintenz issued a statement in which he challenged the constitutionality of the Special Rule’s delegation of authority to the CFTC to determine whether an events contract is contrary to the public interest. Statement of Commissioner Brian D. Quintenz on ErisEX RSBIX NFL Contracts and Certain Event Contracts (Mar. 25, 2021) (available here). While it is true that some Supreme Court Justices have expressed an interest in revisiting the nondelegation doctrine, see Gundy v. United States , 588 U.S. 128, 148–49 (2019) (J. Alito, concurring), the United States Supreme Court has long upheld Congressional delegation of power to executive agencies to regulate in the public interest or to protect the public health. See Whitman v. Am. Trucking Ass’ns , 531 U.S. 457, 472 (2001) (“Section 109(b)(1) of the CAA, which to repeat we interpret as requiring the EPA to set air quality standards at the level that is ‘requisite’ that is, not lower or higher than is necessary—to protect the public health with an adequate margin of safety, fits comfortably within the scope of discretion permitted by our precedent.”); Nat’l Broadcasting Co. v. United States , 319 U.S. 190, 225-26 (1943) (upholding delegation to FCC to regulate broadcast licensing in the public interest); NY Cent. Sec. Corp. v. United States , 287 U.S. 12, 24-25 (1932) (“It is a mistaken assumption that this [delegation of authority to regulate railroads in the public interest] is a mere general reference to public welfare without any standard to guide determinations. The purpose of the [Interstate Commerce] Act, the requirements it imposes, and the context of the provision in question show the contrary.”)
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