TLDR
- Trump said the CFTC’s authority over prediction markets should be preserved.
- Many states argue that prediction markets should be subject to gambling rules.
- Minnesota, New York, Wisconsin and Illinois moved against prediction markets.
- The CFTC has filed legal action to defend federal oversight of event contracts.
- Trump linked regulation of the prediction market to his broader crypto policy stance.
President Donald Trump said the Commodity Futures Trading Commission should retain exclusive authority over prediction markets, adding that his administration will protect the cryptocurrency industry as legal battles between federal and several state regulators intensify.
In a post on Truth Social on Tuesday, Trump said it was “extremely important” to preserve the CFTC’s authority over prediction markets. He said the United States was setting federal rules for event contract platforms, and argued that the country should stay ahead of foreign competitors in the digital commerce and cryptocurrency markets.
Trump also reiterated his pledge to keep the United States as the “cryptocurrency capital of the world,” saying other countries are trying to replace the United States in that role.
CFTC and states clash over prediction markets
Prediction markets allow users to trade contracts based on the outcomes of future events, including elections, sports, economic data, court decisions, and policy actions. Platforms like Kalshi and Polymarket have become central to the debate on whether these products are financial markets or gambling products.
🚨NEW: President Trump just praised @Koftak and @President SeligFight for Fed preemption in prediction markets while promoting America as the cryptocurrency/bitcoin capital of the world.
“It is a big industry and we must protect it.” https://t.co/0HSVyVspkv
– Eleanor Terret (@EleanorTerrett) May 26, 2026
Trump administration and CFTC Chair Michael Selig has argued that prediction markets offered by regulated designated contract markets fall under federal commodity law. Under this view, countries should not be able to ban or regulate products separately.
Many countries differ. Officials in Minnesota, New York, Wisconsin, Illinois, Arizona and Connecticut have moved to restrict, prosecute or investigate prediction market companies. They argue that some event contracts operate like gambling products and should be handled by state gaming regulators.
Minnesota Governor Tim Walz recently signed a law that would make it a felony to operate or advertise prediction market platforms in the state. The Trump administration responded with legal action to defend federal authority.
New York Attorney General Letitia James also filed a lawsuit against cryptocurrency companies Coinbase and Gemini, alleging that their prediction market platforms were running gambling products in the state. The state of Wisconsin has filed a lawsuit against Coinbase, Kalshi, Robinhood, Polymarket, and Crypto.com for alleged illegal sports betting activities.
The legal battle may reach the Supreme Court
The dispute is now moving through the federal courts and could eventually reach the US Supreme Court. The key question is whether prediction market contracts are federally regulated financial products or gambling services that states can restrict.
Supporters of federal oversight argue so Prediction markets They provide useful forecasting tools and should be supervised within a single national framework. State officials say local governments have the authority to protect residents from unlicensed betting products, especially contracts tied to sports, deaths, elections or military actions.
House Oversight and Government Reform Committee Chairman James Comer also opened an investigation into Calci and Polymarket. The investigation examines whether users traded confidential information or other non-public material.
This scrutiny comes on the heels of reports that the CFTC has taken a more positive approach toward prediction markets and cryptocurrency companies under the Trump administration. Some reports also raised questions about changes in hiring and approval processes within the agency.
Donald Trump links prediction markets to crypto politics
Trump’s statement linked prediction markets to the broader cryptocurrency agenda. He said the United States must protect both industries to remain competitive in global finance.
The president and his family have financial ties to digital asset projects. Trump is associated with World Liberty Financial, while Donald Trump Jr. has advisory roles associated with Kalshi and Polymarket. These links have drawn criticism from political opponents who argue that federal policy could benefit companies linked to the president’s family.
Illinois Governor JB Pritzker responded by saying that states should retain the ability to regulate prediction markets, especially if there are insider trading or consumer protection concerns. Wisconsin Attorney General Josh Kaul called the administration’s lawsuit a federal power grab.
Outside the United States, several countries have recently moved against this decision Prediction market Platforms. Indonesia, Spain and India have taken steps to block or restrict access, adding another layer to the international debate over event contract trading.
