US President Donald Trump has publicly backed the Commodity Futures Trading Commission (CFTC) as the primary regulator of prediction markets, arguing that the agency should retain exclusive authority over the rapidly growing industry.
In a post shared Tuesday on his social media platform Truth Social, Trump stated that it is “critically important” for the CFTC to maintain sole oversight of prediction markets so the sector can continue expanding in the United States.
Trump also criticized several state officials and regulators whose states have recently taken legal action against prediction market platforms such as Kalshi, Polymarket, Crypto.com, and Robinhood.
Prediction Markets Face Legal Pressure From States
Several US states have accused prediction market platforms of operating illegal gambling services without proper state licenses.
As a result, some state regulators have issued cease-and-desist orders or launched lawsuits against these companies.
Prediction market operators, however, argue that they are not traditional gambling businesses. Instead, they claim their platforms fall under federally regulated financial markets supervised by the CFTC.
Companies like Kalshi have responded by filing lawsuits against state authorities, arguing that federal law gives the CFTC exclusive jurisdiction over prediction markets classified as designated contract markets.
CFTC Also Defending Federal Authority
CFTC Chair Mike Selig has supported this position, repeatedly stating that prediction markets fall under the agency’s authority through the Commodity Exchange Act.
The CFTC has even filed legal actions against several states, including:
- Minnesota
- Illinois
- New York
- Arizona
for attempting to regulate or restrict prediction market platforms independently.
According to the agency, prediction markets already operate within the existing federal derivatives framework and should not face conflicting state-level gambling regulations.
Trump Says US Must Stay Competitive
Trump argued that prediction markets represent an important new financial sector and warned that other countries are also moving quickly to develop similar industries.
He stated that the United States risks falling behind globally if it does not support innovation in this area.
“It is a major industry, and we must protect it,” Trump wrote.
His latest comments represent a softer tone compared to remarks he made earlier regarding prediction markets.
Last month, Trump told reporters he was uncomfortable with some activity on prediction platforms, particularly after controversial bets linked to geopolitical tensions involving Iran attracted political criticism from Democrats.
However, Trump later changed his tone, warning that the US could be “left out in the cold” if it prevented the growth of prediction market platforms.
Trump Family Ties To Prediction Markets
Prediction markets have also become politically sensitive because of Trump family connections to the industry.
Donald Trump Jr. has invested in Polymarket, joined its advisory board, and also serves as an adviser to Kalshi.
These ties have increased public attention around ongoing regulatory battles involving the platforms.
CFTC Expands Oversight Framework
Earlier this year, the CFTC established a new advisory group focused specifically on event contracts and prediction markets.
The group was created to oversee:
- Market integrity
- Anti-manipulation standards
- Trading surveillance
- Compliance protections
as prediction markets continue growing in popularity across politics, economics, sports, and global events.
The debate now centers on whether prediction markets should primarily be treated as federally regulated financial products or state-regulated gambling activities.
Trump’s latest statement signals strong political support for the federal regulatory approach and may further intensify the ongoing legal battle between state regulators and the prediction market industry.
