Trump Backs $1 Billion Prediction-Market Industry as CFTC Sues 5 States
Updated
Updated · Arizona Capitol Times · May 29
Trump Backs $1 Billion Prediction-Market Industry as CFTC Sues 5 States
2 articles · Updated · Arizona Capitol Times · May 29
Trump on May 26 gave his strongest public backing yet to prediction markets, calling it “critically important” that the CFTC keep exclusive authority so the industry can “thrive.”
Five state lawsuits filed since April mark a sharper federal push to block gambling-law enforcement against platforms such as Kalshi and Polymarket, which argue their contracts are federally regulated derivatives.
States say those sites function like sports-betting operators and have cost them more than $1 billion in lost tax revenue; Minnesota already enacted a ban on prediction markets operating or advertising there.
Sports now drive 90% of Kalshi trading and about two-thirds of Polymarket activity, underscoring how far the sector has shifted from niche event contracts toward mainstream wagering.
Around 30 cases are now pending, and a split between the 9th and 3rd Circuits has increased the odds that the Supreme Court will decide who regulates the market.
As markets blur finance and betting, where will regulators draw the line between a financial tool and a simple wager?
When a bet on war can be traded, how do we police the line between public information and classified intelligence?
40-State Coalition vs. CFTC: The High-Stakes Battle Over Prediction Market Regulation in the U.S. (2026)
Overview
The United States is facing a major legal and political conflict over who should regulate prediction markets, with the Commodity Futures Trading Commission (CFTC) asserting its sole authority and taking aggressive legal action against states like Rhode Island. This federal push has led to court battles, including a federal court in Arizona siding with the CFTC to block state-level prosecution of prediction market platforms. As more states resist and the CFTC escalates its efforts, the dispute is expected to reach the Supreme Court, where a decision will determine whether federal or state regulators have the final say over these fast-growing markets.