U.S. President Donald Trump on Tuesday dramatically shifted his perspective on prediction markets and the Commodity Futures Trading Commission’s (CFTC) authority after vowing to be “never much in favor” of the platforms weeks ago.
Trump shared a post on his Truth Social platform, voicing his support for the CFTC’s argument that it has exclusive authority to regulate prediction markets and related sports event contracts.
“It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive,” said Trump in the social media post.
Trump shared the post as the CFTC enters legal disputes throughout the country regarding the regulatory authority over the delivery of sports event contracts. Some state gaming regulators and legislators take issue with sports event contracts, equating the products to online sports betting markets that bypass state tax obligations and consumer protection standards.
The CFTC and prediction markets embroiled in legal disputes argue the CFTC’s exclusive authority over derivatives in the U.S., citing the Commodity Exchange Act.
Trump quickly changes tone
Trump’s social media post that also commended CFTC Chairman Michael Selig is a shift in tone for the president, who was previously “never much in favor” of prediction markets. The president’s post dropped just two days after a New York Times exposé about prediction market and crypto companies overrunning regulatory bodies tasked with overseeing them under the Trump administration.
Trump previously criticized prediction markets in April after U.S. service member Gannon Ken Van Dyke was arrested for allegedly using classified information to pocket more than $400,000 while trading event contracts on Polymarket tied to the political status of Venezuelan President Nicolás Maduro.
Trump voiced opposition amid widespread insider trading concerns.
“I don’t like it conceptually. It is what it is. I’m not happy with any of that stuff,” Trump told the press from the Oval Office last month.
Not long ago, the president’s own media company announced plans for its own prediction market offering, although the outfit recently appeared to scale back those ambitions. Now, the president seemingly supports the CFTC’s exclusive authority over prediction markets.
Trump takes direct shots at lawmakers
In the Truth Social post, Trump directly named key government stakeholders who are in legal disputes with prediction markets over their delivery of sports event contracts.
Trump named Minnesota Gov. Tim Walz, who is considered “SCUM” by the president. Last week, Walz signed an omnibus bill that implements a prediction market ban in Minnesota. The signature made Minnesota the first state to ban certain event contracts.
The ban extends to sports, pop culture, weather, elections, and war contracts.
The CFTC immediately responded to Walz’s support of the bill by suing Minnesota, Walz, and state Attorney General Keith Ellison in a District Court. The CFTC is seeking injunctive and declaratory relief to stop the implementation of the prediction market ban.
Trump also called out Illinois Gov. JB Pritzker, who issued an executive order in April to prevent state employees and officials from using non-public information to trade event contracts. He also named New York AG Letitia James, who criticizes sports contracts.
James is suing Coinbase and Gemini for allegedly offering “illegal gambling” in the Empire State through the operation of prediction markets. The New York AG is also pushing back against the age limits Coinbase has for event contract trading on its prediction market.
