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President Donald Trump has publicly backed the Commodity Futures Trading Commission’s claim to exclusive federal authority over U.S. prediction markets, siding with the agency as states try to treat event-contract platforms as gambling businesses.
In a post, President Donald Trump said it was “critically important” for the CFTC to retain “exclusive authority” over prediction markets. He also said the U.S. should stay ahead in what he described as a new financial market category.
Trump Says CFTC Should Keep Exclusive Authority
Trump’s intervention gives public White House support to CFTC Chair Michael Selig’s argument that federally regulated event contracts should fall under federal derivatives law. That position matters because prediction market firms are facing state-level challenges from gambling regulators and lawmakers.
Platforms such as Kalshi and Polymarket argue that event contracts are financial products or information markets. Several states have pushed back, saying sports and political event contracts can look like betting products.
Minnesota Law Triggers CFTC Federal Lawsuit
The CFTC escalated the fight on May 19 by suing Minnesota over a new law that would make operating, hosting or promoting prediction markets a crime starting Aug. 1. Selig said the statute would turn lawful operators and participants into felons overnight.
Minnesota Attorney General Keith Ellison defended the law as a response to gambling-related harms. The lawsuit has become one of the clearest tests of whether state gambling laws can restrict event-contract platforms that argue they are federally regulated markets.
Arizona and Illinois Fights Keep Issue Open
The Minnesota case is not the only state-level dispute. The CFTC has also moved against Arizona, Connecticut, and Illinois as part of the broader jurisdiction dispute.
Separately, Kalshi still faces unsettled or adverse outcomes in other states. Nevada has a court-enforced ban against Kalshi in place, while Massachusetts courts have shown doubt toward Kalshi’s federal preemption claims in a sports-contract dispute.
That means Trump’s political support does not settle the legal question. Courts still have to decide how far federal authority reaches when event contracts overlap with state gambling rules.
Prediction market firms gain White House support
For prediction market firms, stronger CFTC backing could help in court battles against state regulators.
It gives platforms another argument that the federal government wants a single national framework instead of state-by-state gambling enforcement.
But the sector still faces scrutiny over fraud controls, insider-trading risks and market-integrity safeguards.
Trump’s post makes the administration’s position clearer. The legal fight, though, remains unresolved as states, courts, and federal regulators continue to test where prediction markets fit under U.S. law.
