Trump backs CFTC authority over prediction markets as legal scrutiny widens

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Trump backs CFTC on prediction markets

Highlights

Donald Trump publicly endorses CFTC's exclusive authority over prediction markets, echoing Commissioner Michael Selig as legal disputes with states intensify.
States like New York, Illinois, and Minnesota challenge CFTC oversight, arguing event contracts are gambling; multiple lawsuits are progressing toward the U.S. Supreme Court.
House committee is investigating prediction markets amid growing scrutiny, while Trump family-linked firms such as Polymarket, Kalshi, and Gemini expand involvement in the sector.

Jurisdiction fight intensifies across states

As reported by CoinDesk, Trump said in a Truth Social post late Tuesday that it is "critically important" for the CFTC to keep "exclusive authority" over prediction markets, echoing CFTC Chair Michael Selig's position as the agency fights state-level challenges.

Trump attacked officials in states that are moving against prediction markets, while repeating his view that his administration is establishing the "rules of the road." The legal clash centers on whether sports and entertainment event contracts offered by regulated designated contract markets are financial instruments under federal oversight or gambling products that states can regulate or prohibit.

The CFTC, now led by Selig as its sole commissioner, has filed lawsuits and amicus briefs against several states to defend its jurisdiction. States including New York, Illinois and Minnesota are taking the opposite position, arguing that some contracts function as gambling and should fall under state gaming laws, a dispute that has already reached the federal appellate level and is likely to reach the U.S. Supreme Court.

Crypto ties and international pressure add stakes

Trump also says other countries are targeting this newer segment of financial markets and argues the U.S. should remain ahead. The post links prediction markets to his broader campaign pledge to keep the U.S. as the world's "crypto capital," while countries including Indonesia, Spain and India have recently moved to ban prediction markets within their borders.

At the same time, scrutiny of the sector is expanding in Washington. A House of Representatives committee investigation into prediction markets was confirmed last week, and The New York Times reported over the weekend that the CFTC under former Acting Chairman Caroline Pham sidelined agency officials who had raised concerns about approvals involving crypto and other companies tied to Trump's family businesses.

Trump family connections to the industry are also drawing attention. Donald Trump Jr. serves as an adviser to Polymarket and Kalshi, while Gemini, founded by Trump supporters Cameron and Tyler Winklevoss, has launched a prediction market platform and filed to self-certify parlay-type contracts late last week.

In our earlier coverage of Kalshi’s prediction-market pricing on U.S. unemployment and AI-related layoffs, we noted that traders were assigning elevated odds to joblessness rising sharply before 2030, alongside bets that AI could become a leading driver of job cuts. The piece framed these probabilities as a signal of growing labor-market anxiety and highlighted how prediction markets are increasingly being used to express views on major economic and policy risks.

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