Trump Advocates for Federal Oversight of Prediction Markets
Former U.S. President Donald Trump urged federal regulators on Tuesday to maintain control over prediction markets, calling it a “critically important” issue as states move to regulate the rapidly expanding sector under their own laws.
“We cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules,” Trump wrote on Truth Social, adding that the Commodity Futures Trading Commission’s (CFTC) “exclusive authority” should be maintained as other countries pursue what he described as a new form of financial market.
Trump stated that prediction markets should “thrive” under federal “rules of the road,” arguing that other countries are actively developing the market and linking the issue to his broader efforts to keep cryptocurrency activity within the U.S.
Trump’s position on prediction markets has evolved in recent months. In April, he stated he was “never much in favor” of prediction markets, claiming they had contributed to turning the world into “somewhat of a casino.” When asked days later if his administration would alter its stance, he said that “very smart” people supported the sector and that the U.S. could be “left out in the cold” if other countries acted first.
“A lot of other countries are doing it, and when the other countries do it, we get left out in the cold if we don’t,” Trump told Decrypt.
Prediction markets allow users to bet on outcomes across various areas, including crypto, traditional markets, sports, weather, politics, and culture. The sector has grown quickly over the past two years and is projected to reach $1 trillion in market volume by 2030.
Federal regulators currently treat prediction markets as event contracts overseen by the CFTC, placing them under derivatives rules rather than state-level gambling laws. State officials have sought to apply gambling laws to prediction market contracts, including through legal actions against Kalshi in Arizona and Nevada. The Trump administration has responded with lawsuits asserting that state attempts to ban prediction markets illegally interfere with federal authority.
Trump’s statements on Wednesday connected the dispute to the CFTC’s current rulemaking efforts, praising Chairman Mike Selig as “doing a great job.”
Selig has called for a framework that would bring exchanges onshore, warning that a failure to establish clear U.S. rules could push activity overseas and lead to FTX-style “implosions.” He added that exchanges should register in the U.S. under rules for fair markets, investor and customer protections, and guardrails.
Industry Concerns and Perspectives
These efforts have faced pushback from lawmakers across the political spectrum, who have raised questions about how federal oversight would address issues such as insider trading, war and death markets, sports-style contracts, consumer risk, and offshore platforms that may still reach U.S. users.
“Prediction markets shouldn’t be a partisan issue,” Farokh Sarmad, co-founder and president of prediction market platform Myriad, told Decrypt. “We’ve already seen this happen with crypto, it set the industry back years and didn’t do lawmakers any favors either.”
He said the Trump administration, through CFTC Chair Mike Selig, is “doing great things to build a framework around prediction markets,” adding that, “The last thing we need is a war.”
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