Small-business risks are central to Brian Quintenz’s argument for treating prediction markets as financial exchanges. The Kalshi advisor and board member makes that case as New York challenges the company’s sports-related contracts.
Quintenz served on the U.S. Commodity Futures Trading Commission from 2017 to 2021. His argument connects potential business uses with a regulatory dispute now playing out in federal court.
In an amNewYork opinion column, he urges regulators to distinguish exchanges from sportsbooks. His position supports Kalshi’s view of its business; it does not resolve the legal disagreement.
A Goat Herder’s Labor Costs Illustrate the Argument
Quintenz describes Northern California goat herder Tim Arrowsmith facing the possibility of sharply higher labor costs. Those costs could more than triple after a state wage exemption expired.
According to the column, no insurer would cover that specific risk. No traditional futures contract existed for it either.
Arrowsmith instead used a Kalshi event contract to hedge against the possibility that state policymakers would not act. Quintenz presents the example as a business application beyond the debate about sports.
The column argues that event contracts can address risks conventional financial products have not reached. It connects that possibility to small businesses facing costs and events outside their control.
New York and Kalshi Disagree Over Regulation
The New York State Gaming Commission argues that sports-related prediction contracts constitute unlicensed wagering. The state’s attorney general has sued Kalshi on that basis.
Kalshi says it operates a federally regulated derivatives exchange. It argues that its event contracts therefore belong within the federal commodities framework.
Quintenz acknowledges consumer-protection questions involving sports contracts, age restrictions and the boundary between financial trading and gambling. His argument is about the appropriate regulatory framework, rather than operating without rules.
He describes a sportsbook as setting wager terms and taking the other side of a customer’s position. By contrast, he says exchange participants trade against one another and collectively determine prices.
In that account, the exchange facilitates transactions between buyers and sellers. Quintenz argues that this difference should matter when regulators assess how prediction markets function.
Potential Uses Extend Beyond Sports Contracts
The column describes businesses beginning to use event contracts for weather, commodity-price and regulatory risks. Quintenz offers an ice cream shop facing an unusually rainy summer as one possible use.
He also points to a transportation business exposed to changing energy prices. These are illustrations of potential applications, not documented results for specific businesses in the column.
Quintenz argues that market prices can also convey participants’ expectations about future events. He says businesses, researchers and policymakers could consider that information alongside polling, economic data and other forecasting tools.
His broader regulatory concern is fragmentation across states. He argues that differing rules for nationally traded contracts would undermine a national marketplace.
That remains the perspective of a Kalshi advisor and board member in an active legal debate. New York’s challenge concerns unlicensed wagering, and Kalshi’s response rests on federal regulation; the disagreement remains before the court.