On May 27, 2026, President Donald Trump expressed his support for the Commodity Futures Trading Commission (CFTC) in its efforts to maintain authority over prediction markets. This statement comes as a conflict arises between federal regulators and state officials regarding the regulation of the growing prediction market industry, which allows users to bet on various outcomes, including elections and weather events.
Trump emphasized the importance of federal oversight, stating, "It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive." He criticized certain Democratic officials advocating for stricter state regulations, including Minnesota Governor Tim Walz, who recently signed legislation to ban prediction markets in the state, prompting legal challenges from federal regulators.
The president argued that maintaining federal control is essential for the U.S. to remain competitive in emerging financial technologies, particularly against foreign rivals. He also praised CFTC Chairman Michael Selig, who has faced criticism for being the only commissioner currently serving on the typically five-member panel.
In Congress, the House Committee on Oversight and Government Reform, led by Rep. James Comer, has initiated an investigation into prediction market firms Kalshi and Polymarket over allegations of insider trading. Additionally, Rep. Ritchie Torres has introduced legislation to prevent federal campaign funds from being used for prediction market wagers, while other Democrats propose broader restrictions on prediction markets related to politics and sports.
Selig has defended the federal government's role in regulating prediction markets, stating, "States cannot circumvent the clear directive of Congress," and warned that legal action would be taken against states that interfere with federal regulations.