Scott Crowell's Plan B warning reframes CFTC silence as strategy

Jason Giles walked out of CFTC headquarters on Monday with nothing — no discussion of the proposed rulemaking, no explanation of the agency's position, no indication of when any of that might change. What he got instead was a single line: "We can't talk about the rule right now." Giles, who runs the Indiana Gaming Association, said publicly two days later that he could not identify any legal basis for that silence, given that the comment period had already closed.

Scott Crowell can identify one. His explanation is not reassuring.

Crowell, who represents tribal gaming interests through his advocacy group, laid out a specific theory during the IGA's New Normal webinar. The CFTC's refusal to engage is not procedural caution — it is preparation. After the CLARITY Act failed in the Senate and after the Ninth Circuit ruled that Kalshi's sports-event contracts constitute "an act of placing a bet or wager" rather than a federally regulated derivative, Michael Selig's agency has run out of legislative and judicial runway. What it has left is rulemaking. And the reason Selig's staff would not discuss the proposed amendments to Regulation 40.11 in a closed-door meeting with a dozen tribal leaders, Crowell argued, is that those amendments are now the primary vehicle — the plan they do not want examined before it lands.

Crowell did not stop there. He said Selig told Congress he would let the courts resolve the sports betting question, then immediately directed staff to file an amicus brief in the Ninth Circuit litigation and initiated suits against states enforcing their own laws. "What credibility?" was his answer when Giles asked what the court losses meant for the agency. The framing matters: Crowell is not describing an agency that is losing — he is describing one that has decided losing in court is a cost it can absorb while it writes the rule that supersedes the outcome.

The Ninth Circuit's ruling gives the tribes something real. Judge Margaret McKeown found they were likely to succeed on their IGRA claims and that the lower court was wrong to classify Kalshi's contracts as derivatives. The case goes back to the district court. But the tribes' problem is timing. A favorable district court ruling on remand takes months. Rulemaking under Regulation 40.11, if Selig moves it quickly, could establish a federal framework that pre-empts the very state and tribal authority the Ninth Circuit just said deserved protection.

I've watched regulators use rulemaking as a cleanup mechanism before — finalizing a rule after losing on the interpretive question, betting that the statutory authority is broader than any single court has said. It usually works until it doesn't, and it tends to work long enough to matter commercially. The gap between the Ninth Circuit's remand and whatever the district court eventually decides is exactly the window Selig needs.