On Tuesday night, President Donald Trump said in a post on Truth Social that it is “extremely important” that the Commodity Futures Trading Commission (CFTC) retain “exclusive authority” over prediction market platforms. This comes at a time when platforms like Polymarket, Kalshi, Robinhood, and… crypto.com It is being criticized by regulators across the United States
The CFTC is currently engaged in active litigation against five states (Wisconsin, Illinois, Arizona, Connecticut, and New York) that have attempted to shut down prediction markets under state gambling laws. A coalition of 39 attorneys general, led by Aaron Ford of Nevada and Dave Yost of Ohio, has lined up behind Massachusetts in its parallel fight to block calcio sports contracts, arguing that Congress never intended to override centuries of state authority over gambling when it wrote the Commodity Exchange Act. And last week we saw it too Minnesota becomes the first state to criminalize prediction marketswith Governor Tim Walz signing a bill that imposes criminal penalties for operating them.
The key legal question at the heart of all this is whether sports and entertainment contracts are derivative or repackaged as a kind of glorified gambling product. However, Trump has named Chris Christie, Letitia James, Tim Walz, and J.B. Pritzker as officials trying to break the federal framework, calling them “shithole” and calling the state’s pushback a competitive risk against foreign rivals. “Other countries are seeking this new form of financial market, and we want to stay on top,” he wrote. For an industry that has spent two years operating in legal gray areas, this level of presidential air cover is the first of its kind.
What Trump actually said and why it matters now
This post pays tribute to newly appointed CFTC Chairman Michael Selig, the only active commissioner on what is intended to be a five-person commission. Selig was appointed in December of last year and spent his first few months prosecuting multiple states. The post clearly indicates that President Trump is giving Selig the green light to continue pressing federal preemptions as hard as he can.
Another angle to this story is the fact that the president has a direct family and business stake in which the regulator wins the battle. Last October, Trump Media announced its entry into the prediction market segment via Truth Predict, a platform integrated into Truth Social through an exclusive arrangement with crypto.com North American Derivatives Exchange, a CFTC registered exchange.
Front Five Lawsuits and Counter-Strike 38-AG
Since April, the CFTC has sued the states of Arizona, Connecticut, Illinois, New York and Wisconsin, arguing that event contracts traded on designated futures markets fall under the Commodity Exchange Act and that the states cannot enforce gambling laws against them. Arizona’s criminal case against Calci has already been temporarily stayed by a judge who said the federal preemption argument would likely win. The Wisconsin lawsuit targets Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase for alleged violations of the state’s gambling law.
The state’s response was equally aggressive. Nevada Attorney General Aaron Ford and Ohio AG Dave Yost authored an amicus brief, joined by 37 other attorneys general, in support of Massachusetts in its fight to keep Calci’s sports contracts out of the state. The coalition noted that more than $1 billion was wagered across 3.4 million sports bets between January and June 2025, nearly 90% of which were related to sports results. Their argument is clear and straightforward: Congress has never explicitly overridden state gambling authority, and the CFTC cannot invent such an overreach from a law that doesn’t even mention gambling.
What happens next
Court observers expect this matter to reach the Supreme Court within the next 12 to 18 months. Until then, prediction market platforms continue to operate in most parts of the country with federal cover, while states like Minnesota actively criminalize them. Pressure from Congress is also mounting, with the House Oversight Committee opening an investigation into Calci and Polymarket over insider trading concerns. Trump’s endorsement makes reversing the federal position more politically difficult, but it does nothing to settle the underlying legal question.
