TLDR
- President Trump posted on Truth Social that the CFTC must keep “exclusive authority” over prediction markets
- Several states — New York, Illinois, Minnesota — have filed lawsuits or issued cease-and-desist orders against prediction market platforms
- The CFTC has sued multiple states defending its jurisdiction under the Commodity Exchange Act
- Trump’s son, Donald Trump Jr., is an adviser to both Polymarket and Kalshi
- Court cases have reached the federal appellate level and may eventually go to the Supreme Court
President Donald Trump has publicly backed the Commodity Futures Trading Commission to be the sole regulator of prediction markets in the United States, calling it “critically important” that the agency keeps its exclusive authority.
Trump made the statement on his Truth Social platform on Tuesday, targeting several state officials who have taken legal action against prediction market platforms.
Trump Takes Aim at State Officials
Trump called out New York Attorney General Letitia James, Illinois Governor J.B. Pritzker, Minnesota Governor Tim Walz, and former New Jersey Governor Chris Christie by name.
James has filed lawsuits alleging that some prediction markets violate state gambling laws. Illinois sent a cease-and-desist order to multiple platforms. Minnesota recently passed a law that imposes criminal penalties on those who operate prediction markets in the state.
Pritzker pushed back on Bluesky, saying Illinois acted to “prevent and ban insider trading with online prediction markets.” He accused Trump of wanting to protect his family’s financial interests in the industry.
Trump’s son, Donald Trump Jr., serves as an adviser to both Polymarket and Kalshi, two of the largest prediction market platforms in the U.S.
The Legal Battle Between Federal and State Authority
At the center of the dispute is whether prediction market contracts are financial instruments or gambling products. The CFTC says they fall under its jurisdiction as derivatives contracts under the Commodity Exchange Act.
States argue these are gambling products and should be regulated or banned under state gaming laws.
CFTC Chair Mike Selig has filed lawsuits and submitted amicus briefs against several states, including New York, Illinois, Minnesota, and Arizona.
Platforms like Kalshi have also sued state authorities, arguing they are regulated solely at the federal level by the CFTC.
The legal cases have already reached the federal appellate court level. Legal experts say the issue could eventually land before the U.S. Supreme Court.
Global Competition and the Crypto Angle
Trump also pointed to international competition in his post. Several countries, including Indonesia, Spain, and India, have banned prediction markets in the past week.
“Other Countries are after this new form of Financial Market, and we want to remain at the top,” Trump wrote. He also referenced his goal of keeping the U.S. the “crypto capital of the world.”
In March, the CFTC set up an advisory team specifically to oversee the listing and trading of event contracts and to monitor anti-manipulation rules.
A House of Representatives committee has also opened an investigation into prediction markets, confirmed last week.
Gemini, the crypto exchange founded by Cameron and Tyler Winklevoss, recently launched its own prediction market platform and filed to self-certify parlay-type contracts.
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