U.S. President Donald Trump declared on May 26 that it is "critically important" for the Commodity Futures Trading Commission (CFTC) to maintain exclusive authority over prediction markets, pushing back against state-level efforts to regulate the sector. In a post on Truth Social, Trump stressed that his administration is crafting federal rules that will serve as the "Gold Standard," while sharply criticizing state officials like former New Jersey Governor Chris Christie, New York Attorney General Letitia James, Illinois Governor J.B. Pritzker, and Minnesota Governor Tim Walz.
The dispute centers on whether prediction market contracts tied to sports and entertainment constitute gambling products under state law. The CFTC, led by sole commissioner Michael Selig, has filed lawsuits and amicus briefs defending its jurisdiction, arguing that all such contracts offered by regulated designated contract markets (DCMs) fall under federal oversight. Several states have countered that these are gambling products and have moved to ban or restrict them, with Minnesota even enacting criminal penalties for operating prediction markets.
Trump’s statement also highlighted global competition, noting that other countries are "after this new form of Financial Market" and that the U.S. must remain "at the top." He reiterated his campaign pledge to keep America the "Crypto Capital of the World," specifically mentioning Bitcoin. The issue has escalated, with a House of Representatives committee launching an investigation and multiple countries, including Indonesia, Spain, and India, recently banning prediction markets. The legal battle is expected to reach the U.S. Supreme Court.
The president’s family has ties to the industry: Donald Trump Jr. advises both Polymarket and Kalshi, while the Winklevoss-owned Gemini exchange recently launched a prediction market platform and filed to self-certify parlay-type contracts. Trump’s push for federal oversight could reduce legal uncertainty for such platforms, potentially encouraging investment and innovation in the sector.
