President Donald Trump threw his support behind the federal agency overseeing prediction markets on Tuesday, amid a growing battle between Washington and the states over who should regulate the rapidly expanding industry.
Trump backed the authority of the Commodity Futures Trading Commission, the federal agency responsible for overseeing derivatives and financial markets, arguing that prediction markets should remain under federal jurisdiction.
“It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive,” Trump posted on Truth Social Tuesday evening. “Under my leadership, we are setting ‘rules of the road’ that are the Gold Standard for the States.”
The president’s comments come as the CFTC is engaged in multiple legal fights with states seeking to impose their own restrictions on prediction market platforms, which allow users to wager on outcomes ranging from weather patterns to elections and geopolitical events.
Trump singled out several Democratic officials pushing for tighter state oversight.
“We cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules,” he said.
The latest clash emerged in Minnesota after Gov. Tim Walz (D-MN) signed legislation to ban prediction markets in the state, prompting legal action from federal regulators and industry advocates.
Trump argued maintaining federal control is critical for keeping the United States competitive against foreign rivals in emerging financial technologies.
“Other Countries are after this new form of Financial Market, and we want to remain at the top,” Trump wrote. “Likewise, and even more importantly, where 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. It is a major Industry, and we must protect it.”
The president also praised CFTC Chairman Michael Selig, who has drawn criticism from Democrats because he is currently the lone commissioner serving on what is typically a five-member bipartisan panel.
At the same time, lawmakers on Capitol Hill are scrambling to address the fast-growing industry amid mounting concerns over insider trading, market manipulation, and corruption.
The House Committee on Oversight and Government Reform, led by Rep. James Comer (R-KY), announced Friday that it was launching an investigation into prediction market firms Kalshi and Polymarket over allegations tied to insider trading safeguards.
Meanwhile, Rep. Ritchie Torres (D-NY) recently introduced legislation that would prohibit federal campaign funds from being used on prediction market wagers.
Other Democrats are pushing for broader restrictions. Rep. Jamie Raskin (D-MD) and Sen. Jeff Merkley (D-OR) have proposed legislation banning prediction markets tied to politics, sports, and military conflicts.
HOW ARE PREDICTION MARKETS REGULATED DIFFERENTLY THAN SPORTS GAMBLING?
Selig has continuously defended the federal government’s role in regulating prediction markets.
“States cannot circumvent the clear directive of Congress,” Selig said in an April statement announcing a lawsuit against Wisconsin. “Our message to Wisconsin is the same as to New York, Arizona, and others: if you interfere with the operation of federal law in regulating financial markets, we will sue you.”