Donald Trump has said it is “critically important” that the federal government retains control over the multibillion-dollar prediction market industry, criticising state-level efforts to impose new restrictions. In a social media post on Tuesday, the US president argued that the Commodity Futures Trading Commission (CFTC) should have “exclusive authority” over the sector.
Prediction markets allow users to place speculative bets on the outcome of events. Their rapid growth has drawn scrutiny from state governments, which view such trading as a form of gambling that would fall under state gaming laws. Industry leaders like Kalshi and Polymarket, however, describe prediction markets as derivatives trading, and the federal government has regulated them through the CFTC.
Trump said he “was never much in favor” of prediction markets, but his media company launched a prediction market product last year, and his son Donald Jr has ties to two leading firms, according to the New York Times. The industry has also raised ethical concerns, as insider knowledge can be used to profit from trades. In one case, US soldier Gannon Ken Van Dyke allegedly used classified information to make over $400,000 on trades involving the capture of former Venezuelan president Nicolás Maduro.
More than a dozen states have considered curbing prediction markets this year. Minnesota became the first state to ban them last week, with Attorney General Keith Ellison saying they are “designed to be addictive and prey especially on young people and low-income folks.” The CFTC filed a federal lawsuit to overturn the Minnesota law the day after it was signed.
In his post, Trump singled out political opponents including Chris Christie, Letitia James, Tim Walz, and JB Pritzker, saying: “We cannot have SCUM like [them] setting the rules!” The Minnesota bill passed with bipartisan support, and Republicans in Utah are also considering measures to curb prediction markets.
