#TrumpBacksCFTCAuthorityOverPredictionMarkets Trump Backs CFTC Authority Over Prediction Markets: Federal vs. State Showdown Erupts

In a fiery social media post that has reignited the debate over the future of online betting, former President Donald Trump has thrown his weight firmly behind federal control of prediction markets, directly clashing with a growing coalition of states seeking to ban or restrict the multi-billion dollar industry .

As platforms like Kalshi and Polymarket surge in popularity—with weekly trading volumes recently exploding from $100 million to over $3 billion—Trump declared it "critically important" that the Commodity Futures Trading Commission (CFTC) maintain "exclusive authority" over the sector . His message was unequivocal: the federal government, not the states, should set the "rules of the road."

'SCUM' and the States

The former president did not mince words regarding his political opponents leading the charge against the industry. In his Truth Social post, he targeted several Democratic figures, including Minnesota Governor Tim Walz, New York Attorney General Letitia James, and Illinois Governor JB Pritzker, as well as former New Jersey Governor Chris Christie .

"We cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules!" Trump wrote, doubling down on his stance that state-level intervention threatens American competitiveness . "Other Countries are after this new form of Financial Market, and we want to remain at the top."

The Core Conflict: Derivative or Gambling?

At the heart of the legal battle is a fundamental disagreement over what prediction markets actually are.

· The Federal View (CFTC & Trump): These platforms operate as financial derivatives markets. Traders buy and sell contracts based on the outcome of future events (e.g., election results, Fed rate cuts, or sports scores). The CFTC regulates this to prevent fraud, treating it similarly to the Chicago Mercantile Exchange .
· The State View (Bipartisan): A growing number of states argue that these contracts—particularly the 87% of Kalshi’s volume currently focused on sports—are functionally identical to gambling. They argue that the platforms circumvent state gaming laws, avoid paying sportsbook taxes, and pose a risk of addiction .

Minnesota recently became the first state to sign a law explicitly banning prediction markets. In response, the Trump administration's CFTC immediately filed a federal lawsuit to overturn the ban, arguing for federal preemption .

The Crypto Connection

Trump explicitly tied the future of prediction markets to the broader crypto industry, vowing to protect the US status as the "Crypto Capital of the World" . Critics, however, point to potential conflicts of interest.

Records indicate that Trump’s eldest son, Donald Trump Jr. , has ties to both Kalshi and Polymarket, while Trump Media & Technology Group has launched its own prediction market-related product . As the White House and the CFTC—led by Chairman Mike Selig, whom Trump praised as "doing a great job"—push forward, the industry watches closely .

For now, the United States is witnessing a high-stakes power struggle: a federal government pushing to legitimize "event contracts" as a new asset class, versus states fighting to protect their turf—and their residents—from what they call "unregulated gambling."