US President Donald Trump has backed the CFTC’s exclusive authority over prediction markets, as federal and state officials fight over who should regulate the fast-growing sector.
summary
- Trump has supported the CFTC’s exclusive authority over prediction markets as states say some contracts should fall under gambling laws.
- The dispute covers contracts related to sports and entertainment, where lawsuits and federal court cases are already testing state and federal authority.
- Trump’s family ties to Polymarket and Kalshi have added more scrutiny as Congress also investigates the prediction market sector.
According to Trump the social truth mail Late Tuesday, keeping the CFTC accountable is “extremely important” as the U.S. works to establish national rules for predicting market contracts. He said his administration sets the “rules of the road” and said states should not control the sector.
Trump also criticized former New Jersey Governor Chris Christie, New York Attorney General Letitia James, Minnesota Governor Tim Walz, and Illinois Governor JB Pritzker. In the same post, he said other countries were chasing the new financial market, and added that the United States wanted to stay ahead.
The Commodity Futures Trading Commission (CFTC) is fighting back against government regulators
The dispute centers on whether prediction markets related to sports and entertainment should be treated as financial contracts or gambling products. The CFTC has argued that contracts listed on regulated designated contract markets fall under federal oversight.
CFTC Chair Michael Selig It supported that position, and Trump’s post reiterated the agency’s view. The regulator has already filed lawsuits and amicus briefs against several states that have attempted to restrict or challenge prediction market operators.
State officials have taken a different stance. They argue that some predictive market contracts operate like gambling and should be subject to state gaming laws.
James has filed lawsuits alleging that some platforms violate government gambling rules. The state of Illinois has sent a cease and desist notice, while Minnesota recently passed a law providing criminal penalties for operating prediction markets. Christie also defended the state’s power to regulate gambling products, which he compared to prediction markets.
The court battle could reach the Supreme Court
Several cases have already moved to federal appeals courts. The dispute could later reach the US Supreme Court if lower courts continue to be divided over federal and state authority.
Meanwhile, the House of Representatives confirmed an investigation into prediction markets. The investigation comes as cryptocurrency companies and platforms linked to Trump allies seek approvals tied to prediction market operations.
The Trump family has connections to the sector. Donald Trump Jr. serves as an advisor to both Polymarket and… everythingwhich are two major providers of the prediction market.
Gemini, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss, has also launched a market forecasting platform. Both Winklevoss brothers have publicly supported Trump, and Gemini recently applied to self-certify investment-style contracts.
Trump also pointed to his campaign pledge to make the United States the “crypto capital.” His participation came at a time when several countries, including Indonesia, announced SpainIndia, to prevent prediction markets from operating in its markets.
The regulatory battle also puts more pressure on prediction market operators as they seek federal approvals while facing challenges at the state level. Any final court decision could determine how platforms list contracts related to elections, sports, entertainment, and cryptocurrency events in the U.S. market.
