Trump backs CFTC oversight of prediction markets amid state legal fights

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Trump backs CFTC on prediction markets

Highlights

Donald Trump publicly supports CFTC's exclusive authority over prediction markets amid ongoing lawsuits and cease-and-desist orders from state regulators.
CFTC Chair Mike Selig asserts federal jurisdiction, suing Minnesota, Illinois, New York, and Arizona to block state-level crackdowns on platforms like Kalshi.
Trump's shift favoring prediction markets highlights U.S. competitiveness concerns as CFTC establishes new advisory teams and event contract oversight in March.

Federal oversight dispute gains political backing

As reported by Cointelegraph, Trump said in a Truth Social post on Tuesday that the CFTC should retain "exclusive authority" over prediction markets and that the sector should be allowed to grow. He also criticized officials in states that have moved against the platforms, arguing his administration is setting national standards for financial market rules.

State authorities argue that some prediction market offerings amount to unlicensed gambling and have responded with lawsuits or cease-and-desist orders. Platforms including Kalshi are pushing back in court, saying they are regulated solely by the CFTC as federally supervised markets.

CFTC Chair Mike Selig is also opposing state intervention, saying the agency has exclusive jurisdiction over prediction markets operating as designated contract markets. The CFTC has sued states including Minnesota, Illinois, New York and Arizona over actions targeting the platforms.

Industry stakes rise for crypto and event contracts

Trump said other countries are pursuing this newer type of financial market and that the U.S. should remain competitive in the segment. He described prediction markets as a major industry that merits protection even after previously expressing discomfort over trading tied to events linked to the Iran war.

His position softens after he told reporters last month that he was not happy with prediction markets and had never strongly supported them. Days later, he said the U.S. would be left behind if it did not permit the platforms, while his son Donald Trump Jr. remains tied to the sector through an investment in Polymarket, a board advisory role there and an advisory position at Kalshi.

In March, the CFTC created an advisory team to oversee the listing and trading of event contracts and to verify that market participants meet anti-manipulation, surveillance and market integrity standards. The agency says prediction markets already fit within its existing derivatives framework under the Commodity Exchange Act.

In our earlier coverage of Kalshi’s prediction-market signals on the U.S. labor outlook, we noted traders were pricing elevated odds of unemployment rising sharply before 2030, alongside growing expectations of AI-driven layoffs. The article linked these market-implied probabilities to the broader debate over AI’s impact on jobs and the potential for concentrated labor-market stress even when recession odds look comparatively lower in the near term.

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