President Donald Trump threw his weight behind federal oversight of prediction markets on Tuesday, saying the Commodity Futures Trading Commission should handle regulation — and blasting state officials who want to treat the bets as gambling as 'scum.'
Federal vs. state turf war
The clash pits the CFTC, which has long viewed some prediction contracts as futures or swaps, against a growing number of states that are pushing to bring the same products under their own gambling laws. Trump’s statement sides squarely with the federal agency, arguing that a patchwork of state rules would stifle the markets and create confusion.
Several states have moved in recent months to classify prediction-market trades — contracts that let users wager on the outcome of elections, sports events or economic data — as illegal gambling. That has threatened the business models of platforms like PredictIt and Kalshi, which operate under CFTC no-action letters or federal court orders.
‘Scum’ remark escalates tension
Trump did not mince words about the state-level regulators. In a social media post, he referred to officials who push to regulate prediction markets under state gambling laws as 'scum.' The language underscores the administration’s determination to keep the oversight at the federal level, where the CFTC is seen as more industry-friendly.
The president’s intervention comes as the CFTC itself is weighing new rules that could either embrace or restrict prediction contracts. The agency has a pending proposal that would ban event contracts tied to political contests, but Trump’s statement suggests he wants a different outcome.
What’s at stake for prediction platforms
For companies running prediction markets, the uncertainty has been costly. Kalshi, which won a federal lawsuit last year allowing it to offer election contracts, still faces legal challenges from states. PredictIt, a smaller academic project, operates under a limited CFTC exemption that expires in 2025.
If the CFTC gains clear federal supremacy, platforms would have a single regulator to deal with — but the rules might still be strict. If states win the power to label the trades as gambling, the industry could splinter into a maze of varying prohibitions.
The CFTC declined to comment on Trump’s remarks. A spokesperson for the National Association of Attorneys General did not respond to a request for comment.
