Trump Supports CFTC’s Oversight of Prediction Markets, Vows to Shield Crypto Sector

TLDR

• Trump stated that the CFTC’s control over prediction markets must be preserved.
• A number of states contend prediction markets belong under gambling regulations.
• Minnesota, New York, Wisconsin, and Illinois have taken action against prediction markets.
• The CFTC has initiated lawsuits to uphold federal supervision of event contracts.
• Trump associated the regulation of prediction markets with his wider pro-cryptocurrency policy position.

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(SeaPRwire) –   President Donald Trump asserted that the Commodity Futures Trading Commission should keep its sole jurisdiction over prediction markets, also vowing that his administration will safeguard the cryptocurrency sector amid escalating legal conflicts between federal regulators and multiple states.

In a Tuesday post on Truth Social, Trump declared it “critically important” to maintain the CFTC’s authority regarding prediction markets. He noted the U.S. is establishing federal regulations for event-contract platforms and insisted the nation must lead foreign rivals in digital trading and cryptocurrency markets.

Trump also reaffirmed his commitment to ensuring the United States remains the “crypto capital of the world,” claiming other nations are attempting to supplant the U.S. in that position.

CFTC and States Clash Over Prediction Markets

Prediction markets enable users to trade contracts tied to the results of future events, such as elections, sports, economic indicators, judicial rulings, and policy moves. Platforms like Kalshi and Polymarket are at the heart of the controversy over whether these offerings are financial instruments or forms of gambling.

NEW: President Trump just praised the @CFTC and @ChairmanSelig’s fight for federal preemption over prediction markets while touting America as the Crypto/Bitcoin Capital of the World.

“It is a major industry and we must protect it.” https://t.co/0HSVyVspkv

— Eleanor Terrett (@EleanorTerrett) May 26, 2026

The Trump administration and CFTC Chairman Michael Selig maintain that prediction markets provided by regulated designated contract markets are governed by federal commodities law. From this perspective, states should not have the power to independently obstruct or regulate these products.

Multiple states oppose this view. Authorities in Minnesota, New York, Wisconsin, Illinois, Arizona, and Connecticut have acted to limit, litigate against, or probe prediction market companies. They claim certain event contracts function similarly to gambling and ought to be managed by state gaming authorities.

Minnesota Governor Tim Walz recently enacted legislation that would classify operating or advertising prediction market platforms in the state as a felony. The Trump administration countered with a lawsuit to uphold federal jurisdiction.

New York Attorney General Letitia James additionally filed suits against crypto companies Coinbase and Gemini, accusing their prediction market platforms of running gambling operations in the state. Wisconsin sued Coinbase, Kalshi, Robinhood, Polymarket, and Crypto.com for alleged unlawful sports betting activities.

Legal Fight May Reach Supreme Court

The conflict is now proceeding through federal courts and may ultimately be presented to the U.S. Supreme Court. The core issue is whether prediction market contracts are federally regulated financial instruments or gambling services subject to state restrictions.

Proponents of federal oversight contend that prediction markets serve as valuable forecasting mechanisms and should be monitored under a single national system. State officials argue that local governments possess the authority to shield citizens from unlicensed betting products, particularly contracts related to sports, deaths, elections, or military operations.

House Oversight and Government Reform Committee Chairman James Comer has also launched an inquiry into Kalshi and Polymarket. The probe is assessing whether users might have traded using classified or other non-public information.

This examination comes after reports indicated the CFTC has adopted a more supportive stance toward prediction markets and crypto companies during the Trump administration. Some reports have also queried staffing shifts and internal approval procedures at the agency.

Donald Trump Links Prediction Markets to Crypto Policy

Trump’s remarks tied prediction markets to his broader cryptocurrency strategy. He emphasized that the U.S. needs to defend both sectors to maintain competitiveness in global finance.

The president and his relatives have financial connections to digital asset enterprises. Trump is associated with World Liberty Financial, and Donald Trump Jr. holds advisory positions linked to Kalshi and Polymarket. These ties have prompted criticism from political rivals, who suggest federal policy might favor businesses connected to the president’s family.

Illinois Governor J.B. Pritzker retorted that states should keep the power to regulate prediction markets, particularly where issues like insider trading or consumer protection arise. Wisconsin Attorney General Josh Kaul characterized the administration’s lawsuit as an overreach of federal power.

Internationally, several nations have recently acted against prediction market platforms. Indonesia, Spain, and India have implemented measures to block or limit access, introducing another dimension to the global discussion on event-contract trading.