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US President Donald Trump has backed federal control over prediction markets as the CFTC fights several states in court over event contracts, sports markets, and gambling law. The dispute now sits at the center of a wider fight over whether federally regulated contracts should override state gaming restrictions.
Good to Know
Prediction markets have turned into one of the sharpest legal fights in US gambling policy. Trump now sits firmly with the CFTC, while several states argue that sports and entertainment event contracts look too much like gambling to sit outside state control.
“It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive,” Trump wrote on Truth Social. “Under my leadership, we are setting ‘rules of the road’ that are the Gold Standard for the States.”
The CFTC has already taken legal action against Arizona, Connecticut, Illinois, and New York. The agency says state officials cannot block or regulate CFTC-registered designated contract markets when those platforms list event contracts under federal commodities law.
State officials see the issue differently. They argue that contracts tied to sports, entertainment, politics, and other public events function like betting products. Under that view, state gaming regulators should supervise them or ban them where local law does not allow them.
Trump tied the prediction market dispute to crypto policy as well. “Likewise, and even more importantly, while we are currently the Crypto (Bitcoin, etc.) Capital of the World, other Countries are trying diligently to replace us in that capacity, but we won’t let that happen,” he said.
The comments also targeted officials who have opposed or questioned prediction markets. “We cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules!” he said.
Kalshi, Polymarket, and similar platforms have tested old lines between financial markets and gambling. Industry backers say event contracts offer a regulated financial product. State gaming officials counter that a sports outcome contract still lets customers stake money on a game result, no matter which federal label applies.
Legal pressure has grown outside the US too. Spain blocked access to Polymarket and Kalshi while regulators review whether the platforms operated without required gambling licenses. Reports have also pointed to restrictions or bans involving prediction market operations in Indonesia and India.
Trump framed the product as part of a wider financial market race. “Other Countries are after this new form of Financial Market, and we want to remain at the top,” he said.
The court fight could eventually reach the US Supreme Court. Until then, prediction market operators, state gaming regulators, and the CFTC face a messy split over who gets final control of event contracts.
Prediction markets let users trade contracts tied to future outcomes, such as elections, sports results, entertainment awards, or economic events.
The CFTC oversees derivatives markets and designated contract markets. Prediction market operators argue that event contracts listed on federally regulated markets fall under CFTC authority.
Several states argue that event contracts tied to sports or entertainment outcomes resemble gambling and should follow state gaming law.
Trump said CFTC authority over prediction markets should be maintained and linked the issue to US leadership in crypto and financial markets.
Yes. Court disputes over CFTC authority and state gambling rules have already moved into federal courts, and the issue could reach the US Supreme Court.