Trump steps in to support CFTC jurisdiction over prediction markets: proper regulation is crucial, many states misuse laws to impose sanctions

US President Trump publicly backs the CFTC’s exclusive jurisdiction over prediction markets, calling it “crucial,” while also harshly criticizing multiple state-level officials for trying to go after prediction platforms using local gambling laws.
(Background: The Trump administration supports Polymarket and Kalshi! The U.S. Department of Justice and the CFTC sue Arizona and two other states, triggering a jurisdictional battle over prediction markets.)
(Additional context: CFTC Chair: Arizona’s criminal case against Kalshi is “completely inappropriate”—this is not a crime, but a jurisdictional dispute.)

Table of Contents

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• Federal vs. State Jurisdiction Battle
• Trump’s Position Shift and Conflict of Interest
• The Regulatory Framework for Prediction Markets Still Needs to Be Established
• International Competition and Takeaways for Taiwan

On Tuesday, U.S. President Trump posted on Truth Social, publicly supporting the U.S. Commodity Futures Trading Commission (CFTC)’s “exclusive jurisdiction” over prediction markets, while criticizing multiple state-level officials for trying to target prediction platforms under local gambling laws.

In the post, Trump wrote: “The CFTC’s exclusive jurisdiction over prediction markets must be maintained; it is vital for the development of the industry.”

Federal vs. State Jurisdiction Battle

Multiple state attorneys general and regulators argue that prediction market platforms (Kalshi, Polymarket, Crypto.com, Robinhood) are providing gambling services without authorization and have filed lawsuits or issued cease-and-desist orders. CFTC Chair Mike Selig, meanwhile, insists that prediction markets fall under the federally designated contract market (DCM), and that state-level intervention creates a federal priority jurisdiction dispute.

The CFTC has filed lawsuits against Minnesota, Illinois, New York, and Arizona, seeking to stop state-level regulatory actions. This is already the third major round of legal battles on the road to legalizing prediction markets. During the 2024 U.S. election period, trading volumes on Polymarket and Kalshi surged, drawing large numbers of retail and institutional participants; afterward, state regulators began moving against the platforms under the banner of “unlicensed gambling.”

Trump’s Position Shift and Conflict of Interest

Trump’s shift in posture has sparked questions about conflicts of interest. Last month, he told reporters that he was “not very satisfied” with prediction markets, after controversy emerged over “timely bets” related to the war involving Iran on the platform. But after his son, Donald Trump Jr., became an advisor and director at Polymarket and Kalshi and held shares in both platforms, his stance clearly softened.

Donald Trump Jr. is listed as an advisor on two major competing prediction platforms, making Trump’s declaration of “neutral support for the CFTC” even more complex. If the CFTC truly obtains exclusive jurisdiction, the valuations of Polymarket and Kalshi could jump significantly due to regulatory clarity.

The Regulatory Framework for Prediction Markets Still Needs to Be Established

In March, the CFTC set up a dedicated advisory panel to oversee the listing and trading of event contracts, ensuring that market participants meet requirements related to anti-manipulation, surveillance, and market integrity. The CFTC argues that prediction markets fall within the existing derivatives framework under the Commodity Exchange Act, meaning they should be regulated federally rather than by states.

However, multiple state attorneys general clearly don’t buy it. In Trump’s post, former New Jersey Governor Chris Christie, New York Attorney General Letitia James, Minnesota Governor Tim Walz, and Illinois Governor JB Pritzker were all directly singled out and criticized. Trump described them as “scum that sets the rules.”

International Competition and Takeaways for Taiwan

In the post, Trump emphasized: “Other countries are also pursuing this kind of new financial market, and we want to maintain a leading position.” This points to prediction markets becoming the arena for global competition in financial innovation. In the United Kingdom, the London Metal Exchange (LME) has already established an independent prediction market division, and the European Union is also pushing to classify prediction contracts under its digital asset regulatory legislation.

For Taiwan’s crypto market, the U.S. federal-vs-state jurisdiction dispute offers an important reference. If Taiwan’s prediction market platforms seek a compliant path in the future, they may cite the CFTC’s “federal priority” principle to argue that regulation should be unified under a single federal-level authority, avoiding a multi-head approach by local levels (such as county or department levels). Taiwan currently has multiple parties—including the Financial Supervisory Commission, the Securities and Futures Commission, and even county or municipal governments—having a say in the regulation of crypto gambling and derivatives, which is highly similar to the U.S. federal-vs-state dispute. If the CFTC ultimately prevails, Taiwan’s regulators will face greater pressure to accelerate the establishment of a clear crypto derivatives framework.