Trump Backs CFTC Authority Over Prediction Markets

U.S. President Donald Trump reversed his public position on prediction markets as of May 27, 2025, endorsing the Commodity Futures Trading Commission's claim to exclusive regulatory authority over the sector via a Truth Social post — weeks after stating he was "never much in favor" of such platforms.

Why It Matters

Trump's pivot hands the CFTC a significant political tailwind in its ongoing jurisdictional dispute over prediction markets, which platforms like Kalshi and Polymarket have watched closely. If the CFTC cements exclusive authority, it could preempt a patchwork of state-level restrictions that currently limit U.S. participation in event-contract trading. For crypto-native prediction platforms, federal regulatory clarity would likely accelerate institutional participation and product expansion. As with all speculative markets, however, participants should note that prediction market trading carries real financial risk regardless of the regulatory framework.

Context

The CFTC has argued for years that event contracts — including political and economic outcome markets — fall under its jurisdiction as derivatives. Per SBC Americas, Trump had publicly distanced himself from prediction markets only weeks before this reversal, making the Truth Social endorsement a notable shift. Kalshi won a landmark federal court ruling in August 2024 allowing it to list political event contracts, a decision that intensified the broader regulatory debate.

What's Next

The CFTC's jurisdictional case will likely gain momentum with executive backing, and congressional scrutiny of the agency's authority over prediction markets could follow. Watch for formal rulemaking signals from the CFTC or White House guidance clarifying the scope of permissible event contracts.

Source: SBC Americas. Gambling and prediction market trading involve financial risk.