Trump has publicly backed prediction markets as a legitimate part of the US financial system, arguing that federal regulators rather than individual states should oversee the fast-growing sector.
In a recent statement, Trump said the Commodity Futures Trading Commission (CFTC) should retain “exclusive authority” over prediction markets, warning against what he described as politically motivated attempts by states to restrict the industry. His comments come as several US states move to tighten controls on platforms such as Kalshi and Polymarket.
Prediction markets allow users to trade contracts tied to real-world outcomes, including elections, sports and geopolitical events. Supporters view them as financial forecasting tools, while critics argue they resemble online gambling and should face stricter state-level regulation.
Trump’s intervention follows mounting legal and political pressure on the sector. Minnesota recently became the first US state to ban prediction markets outright, prompting the CFTC to challenge the decision in federal court. Other states, including Utah and Nevada, are also considering restrictions or legal action.
The debate has intensified alongside growing concerns about insider trading risks on these platforms. US lawmakers have recently demanded records from major operators after allegations that some users may have profited from privileged political or military information.
Despite previously expressing skepticism about betting markets, Trump and his family have developed ties to the industry. Donald Trump Jr. has reportedly advised or invested in companies linked to the prediction market space, while Trump Media has explored its own prediction-based products.
Industry leaders continue to argue that prediction markets fall under financial derivatives law rather than gambling legislation. Federal regulators under the Trump administration have largely supported that position, setting up a broader clash between Washington and state gaming authorities over who should control the future of event-based trading in the US.