Congressman Hurd Page 3 of 3
These new CFTC authorized sports event contracts violate the laws of approximately 20 states that prohibit online sports betting and nearly a dozen states that prohibit any form of sports betting. As such, sports event contracts infringe upon the well-established police power of states to regulate gambling within their borders . Ah Sin v. Wittman , 198 U.S. 500, 505–06 (1905). CFTC authorized bets on sports also violate the federal Wire Act, which prohibits anyone from “knowingly us[ing] a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers… on any sporting event or contest.” 18 U.S.C. § 1084. The U.S. Courts of Appeals and the DOJ have consistently held the Wire Act to prohibit interstate online sports betting. N.H. Lottery Commission v. Rosen , 986 F.3d 38, 61-62 (1 st Cir. 2021). Sports event contracts may also conflict with other federal statutes including the Wagering Paraphernalia Act , 18 U.S.C. § 1953 and the Federal Wagering Tax Act , 26 U.S.C. §§ 4401- 4413. In sum, sports event contracts are prohibited because they violate state and federal laws. Additionally, sports and other such nebulous “event contracts” authorized by the CFTC must be prohibited because they are contrary to the public interest. Unlike tribal and state-regulated sports betting, which protect the public through age verification, geolocation restrictions, key employee background checks and financial integrity reviews, lists of prohibited participants, including a prohibition against athletes from gambling, “Know Your Customer” programs and AML controls; CFTC sports event contracts lack comparable safeguards. Sports event contract operators allow persons under 21 to gamble in violation of tribal and state laws, while portraying sports bets as “investments”—confusing the public about the risks of gambling . (emphasis added). By allowing these event contracts that are wholly unrelated to commodities, the CFTC risks making public policy decisions that ignore the detrimental impacts from sports betting that every State and Tribal government has a sovereign duty to evaluate. We have attached several articles detailing the insider trading issues involving prediction markets that showcase the complete lack of internal and CFTC regulation of these supposedly federal commodity markets. Therefore, the IGA urges you to back the Moore-Carbajal legislation and mandate the CFTC to stay committed to their responsibilities under the CEA and stay out of this Nation’s gambling policy for which they have no mechanisms to enforce or regulate. I look forward to discussing this issue with you and your staff further. Sincerely, /s/ DAVID BEAN Chairman David Z. Bean 224 2 nd Street SE Washington, DC 20003
Made with FlippingBook - Online catalogs