Trump Defends Prediction Market Companies Against State Regulations

On Tuesday, President Donald Trump announced his support for prediction market companies, calling for continued federal control while lambasting state regulators.

“It is critically important” that the federal Commodity Futures Trading Commission (CFTC) maintain “exclusive authority over Prediction Markets” in order for them to “thrive,” Trump wrote on Truth Social.

“Other Countries are after this new form of Financial Market, and we want to remain at the top,” he continued, adding that the U.S. is “currently the Crypto […] Capital of the World” and we “won’t let” other countries “replace us in that capacity.”

In the same post, Trump lambasted officials in states that have attempted to regulate prediction market platforms as “SCUM” and said that they cannot be “setting the rules” for the industry.

The CTFC has filed lawsuits against state governments attempting to regulate prediction markets like Polymarket and Kalshi, arguing that the federal agency has “exclusive jurisdiction” to regulate these markets.

At least 20 lawsuits have been filed against prediction market companies, asserting that they are gambling platforms and should be regulated as such. Prediction markets have exploded over the past year and a half, with Kalshi and Polymarket leading the way. Nearly $12 billion was traded on sites like Kalshi and Polymarket in December 2025 alone. The sites allow for betting on the outcome of events including sports games, the weather, elections, and wars — all of which have brought scrutiny and concern over ethics, manipulation of events, and war profiteering.

Trump’s second term has overturned regulations that guarded this industry, allowing it to grow exponentially. Donald Trump Jr., Trump’s son, is an advisor to both Polymarket and Kalshi, and is a partner at 1789 Capital firm, a right-wing firm that invested $10 million into Polymarket in August 2025.

Polymarket and Kalshi have also enabled a new form of war profiteering, seemingly allowing individuals with insider knowledge to bet and profit off of the U.S.-Israeli war on Iran.

At the start of the war in February, six Polymarket accounts made a profit of $1 million after correctly predicting the first U.S. strike on Iran, raising questions about insider information and regulations.

In March, an Israeli air force reservist was charged with using classified information on the U.S.-Israeli war on Iran to place bets on Polymarket on the timing of Israel’s strikes during the war.

And in April, a U.S. special forces soldier who helped kidnap former Venezuelan President Nicolas Maduro in January was charged with using classified information to profit from a bet on Polymarket.

In response to questions about the U.S. soldier and concerns about federal employees taking part in insider trading on the prediction markets, Trump said he “was never much in favor” of these markets, and that “the whole world unfortunately has become somewhat of a casino.” But even then, before the about-face in his public comments on Tuesday, he was fighting efforts to regulate the markets.

Earlier this month, reports revealed that the Trump administration had filled the CFTC with industry insiders, and that officials at the agency have been put on leave for simply asking questions about the prediction markets’ connections to Trump and his family.