Trump calls upon CFTC to protect prediction markets – ‘It’s a major industry!’
The Trump family's conflict of interest has deepened in the prediction markets.
U.S. President Donald Trump has sided with the Commodity Futures Trading Commission (CFTC) amid an ongoing legal fight with states over the multi-billion-dollar prediction markets.
In a post on Truth Social on Tuesday, Trump said,
It’s critically important that the CFTC’s exclusive authority over prediction markets is maintained and that they thrive. It’s a major industry, and we must protect it.
It’s worth pointing out that Trump backed the sector as ‘financial markets’ and not ‘gambling’ platforms, as critics portray them. In fact, this is a similar framing that most supporters, like venture firm a16z and others, have been using.
For them, prediction markets are crucial risk management tools for hedging against future events. As such, they should be allowed to “thrive” and improve through enough liquidity.
But ongoing states’ push for control over the sector can fragment liquidity and make prediction markets less accurate as forecasting tools.
Prediction markets: Is Trump enough for states to back off?
In contrast, some states argue that these platforms are operating as betting sites and should be treated as such under gambling laws.
In fact, the trading volumes on the two major platforms, Polymarket and Kalshi, are dominated by sports and elections markets. For critics, this makes them “100% gambling platforms.”
Against this backdrop, Minnesota recently passed a law that bans prediction markets with criminal charges for anyone found operating them. Arizona, Connecticut, Illinois, New York, and Wisconsin have also moved to ban or regulate these markets.
In rejoinder, the CFTC has moved to block these moves, claiming sole authority in the sector.
So, Trump’s backing for the CFTC and its chair, Mike Selig, could boost the federal regulator’s push and authority claim over the sector.
However, the different rulings on the jurisdictional fight by lower courts suggest that the final decision may rest with the Supreme Court, not Trump’s support.
That said, Trump slammed Chris Christie, an advisor to the American gambling industry lobby, which opposes prediction markets. Similarly, the president took a swipe at governors and judges who are pushing back against prediction markets, calling them ‘scums.’
However, one must remember that the Trump family also has a conflict of interest in the sector.
Donald Trump Jr. is an investor and part of the advisory board at Polymarket. He’s also a strategic advisor to Kalshi, and Trump’s Truth Social has rolled out its prediction platform, TruthPredict, in partnership with Crypto.com.
Final Summary
- Trump has backed prediction markets as a ‘new form of financial markets,’ pressing for the CFTC to have exclusive authority in the sector.
- However, the Trump family’s conflict of interest in the segment continues to raise scrutiny.
