Trump argued that prediction markets should stay under federal oversight through the CFTC instead of state regulation. The debate centers on whether prediction markets qualify as federally regulated derivatives products or illegal betting platforms. Trump also warned that the US could fall behind other countries if it restricts the industry too heavily.
Trump Backs Federal Control of Prediction Markets
US President Donald Trump publicly defended the authority of the Commodity Futures Trading Commission (CFTC) over prediction markets due to the growing legal pressure against the industry in several US states. In a post that was shared on his social media platform Truth Social on Tuesday, Trump argued that the CFTC should maintain “exclusive authority” over prediction markets and the industry should be allowed to continue operating and expanding in the United States.
Truth Social post by President Donald Trump
Trump criticized state officials and regulators that have taken action against prediction market platforms like Kalshi, Polymarket, Crypto.com, and Robinhood. Several states have either filed lawsuits or issued cease-and-desist orders against these companies, arguing that they are offering unlicensed gambling products under the guise of financial markets. Trump dismissed this and claimed that prediction markets are an important new financial industry that should stay under federal oversight instead of state-level control.
The legal debate centers around whether prediction markets should be treated as federally regulated derivatives products or as forms of online gambling. Companies like Kalshi argued in court that their markets fall under the Commodity Exchange Act and are therefore regulated exclusively by the CFTC.
Current CFTC Chair Mike Selig supported this position by stating that the agency has exclusive jurisdiction over federally approved prediction markets. The CFTC has even taken legal action against several states, including New York, Illinois, Minnesota, and Arizona, over attempts to restrict these platforms.
Trump framed the issue as part of a global competition in financial technology. He argued that other countries are also embracing prediction markets and warned that the United States could fall behind if it imposes excessive restrictions. According to Trump, prediction markets are a major emerging industry that could play an important role in the future of finance.
Despite his recent support, Trump previously expressed skepticism toward prediction markets. Just last month, he told reporters that he was “not happy” with the platforms after controversy emerged surrounding suspiciously timed bets tied to geopolitical developments involving Iran. The situation drew a lot of criticism from Democratic lawmakers, who called for stricter oversight and stronger consumer protections. However, Trump later softened his stance and said the United States would risk being “left out in the cold” if it failed to support the industry.
Interestingly, Trump and his family also have ties to the sector. His son, Donald Trump Jr., reportedly holds investments in Polymarket, sits on its advisory board, and advises Kalshi.
