Scott Crowell's tribal meeting question leaves CFTC exposed

Jason Giles left CFTC headquarters on Monday without a single answer about the agency's proposed prediction market rules — not because the meeting ran short, but because Michael Selig and his staff refused to discuss them at all.

A dozen tribal leaders had travelled to Washington to talk about a rulemaking that had already completed its public comment period. The CFTC's position, as Giles relayed it during the Indiana Gaming Association's webinar two days later: "We can't talk about the rule right now." No legal basis offered. No alternative forum suggested.

Giles said he did not know what law prohibited Selig from discussing a completed notice of proposed rulemaking, and he was right to be puzzled. Comment periods exist precisely because the agency has chosen to engage the public. Closing that conversation after accepting the comments is not procedural caution — it is a choice.

Scott Crowell's answer to Giles's question about court credibility — "What credibility?" — was blunt, but the argument underneath it is the one worth taking seriously. Selig told Congress he would let the courts resolve the sports betting question. The Ninth Circuit then ruled that Kalshi's event contracts constitute illegal sports betting on tribal lands. The CFTC's response, according to Crowell, was to direct the entities it regulates to defy those court orders. If that characterisation is accurate, the agency is not navigating legal ambiguity — it is manufacturing a confrontation it calculates it can win on appeal or through regulatory fait accompli.

Crowell's speculation about Plan B deserves attention. His read: the silence around the rulemaking is deliberate, because the rule is the fallback when the CLARITY Act failed and the courts started ruling against the CFTC's preemption argument. A finalised rule that explicitly asserts federal exclusivity over event contracts would give Selig something the litigation strategy has so far failed to produce — a codified regulatory instrument that states and tribes would then have to challenge directly, on different procedural ground, in different courts, over a longer timeline.

I have watched regulators use rulemaking as litigation strategy before. It tends to work better in theory than in practice, because the underlying legal question — here, whether IGRA tribal exclusivity survives a CFTC preemption claim — does not change because the agency has dressed it in new procedural clothes. The Ninth Circuit did not rule against Kalshi on a technicality. Judge McKeown's language was categorical: these are bets. A notice of proposed rulemaking does not rewrite that sentence.

What the tribal leaders are now facing is a two-front problem. The courts are moving in their direction, but slowly and unevenly across circuits. The rulemaking, if finalised, would reset the clock and shift the venue. Giles's frustration is reasonable, but the silence in that room on Monday may be the most informative thing the CFTC has communicated in months.