US President Donald Trump has thrown his weight behind the Commodity Futures Trading Commission (CFTC), asserting that the federal agency must maintain “exclusive authority” over the rapidly expanding prediction markets sector.
In a fiery post on his social media platform Truth Social, Trump emphasized the strategic importance of these platforms and took aim at several state officials who have launched legal crackdowns against them.
“It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive,” Trump posted on Tuesday.
Federal Authority vs. State Crackdowns
The intervention comes as platforms like Kalshi, Polymarket, Crypto.com, and Robinhood face intense scrutiny from state regulators. Local authorities argue that these platforms violate state laws by offering unlicensed gambling services.
Trump did not mince words when addressing the state officials leading these legal offensives, including Chris Christie, Letitia James, Tim Walz, and JB Pritzker:
“Under my leadership, we are setting ‘rules of the road’ that are the Gold Standard for the States. We cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules!”
To counter state-level cease-and-desist orders, prediction markets have argued in court that they operate as federally regulated designated contract markets, placing them solely under the CFTC’s purview.
The CFTC’s Stance and Global Ambitions
CFTC Chair Mike Selig has mirrored this sentiment, asserting the agency’s “exclusive jurisdiction” over event contracts. The federal regulator has already engaged in legal battles with states like Minnesota, Illinois, New York, and Arizona to defend its regulatory turf.
Trump warned that excessive local red tape could push this financial innovation offshore. While Trump was previously skeptical of prediction markets—particularly regarding sensitive geopolitical bets—his stance has softened. This shift comes amid reports that his son, Donald Trump Jr., holds advisory and investment roles at both Polymarket and Kalshi.
Frequently Asked Questions (FAQ)
Why are state regulators targeting prediction markets?
State officials argue that betting on real-world events, such as elections or economic indicators, constitutes unlicensed gambling and violates local consumer protection laws.
What is the CFTC’s role in prediction markets?
The CFTC regulates these platforms under the Commodity Exchange Act, treating event contracts as derivatives and asserting federal preemption over state-level gambling laws.
