TL;DR:
- Trump backed the CFTC’s exclusive authority over prediction markets and attacked state officials seeking to regulate them as gambling.
- The prediction markets sector projects reaching $1 trillion in volume by 2030 and is facing multiple legal disputes in states such as Arizona and Nevada.
- CFTC Chair Mike Selig is working on a federal regulatory framework to prevent activity from moving offshore and triggering a crisis like the FTX collapse.
Donald Trump backed federal authority over prediction markets, calling the matter “critically important” as several states move to treat this fast-growing sector under their own gambling laws. In a post published on Truth Social, the president lashed out at state governors and attorneys general, calling them “scum“, and demanded that the Commodity Futures Trading Commission (CFTC) retain “exclusive authority” over these financial instruments.
“We can’t have scum like Chris Christie, Letitia James, Tim Walz and JB Pritzker setting the rules,” Trump wrote, arguing that other countries are already developing this market and that the United States could be left behind if it does not act first. The president’s position explicitly linked prediction markets to his agenda to keep crypto activity within national borders.
Trump Enters the Federal Battle Over Prediction Markets
Prediction markets allow users to bet on outcomes in areas such as cryptocurrencies, traditional markets, sports, politics and culture. The sector projects reaching $1 trillion in volume by 2030. At the federal level, the CFTC regulates them as event contracts under derivatives rules, which places these instruments outside the reach of state gambling laws. However, officials in Arizona and Nevada have already launched cases against the platform Kalshi to enforce their own regulations, and the Trump administration responded with legal actions asserting that those attempts illegally interfere with federal authority.
The CFTC Seeks to Keep Crypto Activity on U.S. Soil
Trump praised CFTC Chair Mike Selig, noting that he “is doing a great job.” Selig has been working on a regulatory framework that would require exchanges to register in the United States under consumer protection and fair markets standards, warning that the absence of clear rules could cause activity to move offshore and trigger collapses similar to FTX.
However, legislators from both parties questioned how federal oversight would handle consumer risk, the use of insider information and contracts tied to wars or deaths. Farokh Sarmad, co-founder and president of the platform Myriad, warned that turning prediction markets into a partisan issue could replicate the damage that political fragmentation caused in the crypto industry: “We already saw this with cryptocurrencies, it cost the sector years and did no favors to lawmakers.”
