A defiant Donald Trump has underscored the importance of the federal agency that oversees derivates markets, the Commodity Futures Trading Commission (CFTC), maintaining oversight of the multi-billion-dollar prediction markets industry in the US.
In a no-punches-pulled post on American social media platform Truth Social, Trump stated it was “critically important that the CFTC’s exclusive authority over prediction markets is maintained”, amid ongoing legal disputes between prediction markets platforms and state regulators.
Trump took aim at Minnesota Governor Tim Walz, New York Attorney General Letitia James, Illinois Governor JB Pritzker and former New Jersey Governor Chris Christie over previous comments and actions relating to prediction markets.
In April, James filed lawsuits against crypto exchanges Gemini and Coinbase, both of which have expanded into offering event contracts.
In the same month, the CFTC filed complaints against lawmakers in Arizona, Illinois and Connecticut after each state issued cease-and-desist orders against prediction market platforms.
Walz signed a sweeping prediction markets ban into law in Minnesota earlier this month, prompting the CFTC to respond with a lawsuit 24 hours later.
Pritzker was responsible for an executive order banning state employees in Illinois from profiting from insider trading on prediction markets.
Trump wrote: “It is critically important that the CFTC’s exclusive authority over prediction markets is maintained, and that they will thrive. Under my leadership, we are setting ‘rules of the road’ that are the gold standard for the states.
“We cannot have SCUM like Chris Christie, Letitia James, Tim Walz and JB Pritzker setting the rules! Other countries are after this new form of financial market and we want to remain at the top.
“Likewise, and even more importantly, where we are currently the crypto capital of the world, other countries are trying diligently to replace us in that capacity, but we won’t let that happen. It is a major industry and we must protect it. Mike Selig, CFTC chairman and respected by all, is doing a great job.”
States such as Ohio, Michigan, Nevada, Massachusetts and Washington have also taken action against prediction market platforms in recent months, although Kalshi was able to secure a key victory against New Jersey regulators in April.
On 19 May, Minnesota became the first US state to ban prediction markets, yet the Trump administration had launched a lawsuit in response.
Last week, Rhode Island Attorney General Peter Neronha filed lawsuits against Polymarket and Kalshi, demanding they cease offering prediction markets in the state.
Pritzker responded to Trump’s Truth Social post by saying: “Illinois took action to prevent and ban insider trading with online prediction markets in our state.”
“The most corrupt president in our nation’s history wants to make sure states like ours can’t regulate prediction markets so his family and administration can keep profiting.”
Trump’s son, Donald Trump Jr, acts as an adviser to both Kalshi and Polymarket. Investment firm 1789 Capital – where Trump Jr serves as a partner – made a strategic investment in Polymarket last August.
Earlier this month, Kalshi achieved a $22bn valuation following a $1bn Series F funding round.
Worldwide, regulators in Brazil, Spain and the Netherlands have also issued bans against prediction market platforms since the turn of the year.
According to a recent prediction markets report produced by boutique analyst firm Eilers & Krejcik Gaming (EKG), Kalshi has risen to become number four among online sports betting operators on an adjusted handle per-adult basis.
However, EKG also noted that US activity is concentrated in non-online sports betting states like California and Texas, suggesting prediction markets aren’t cannibalising sportsbook handle in regulated sports betting jurisdictions.
Certain hedge funds have generated paper profits of more than $2.3bn shorting leading gambling stocks such as Flutter Entertainment and DraftKings exposed to the threat posed by prediction markets.
The post Trump warns “scum” not to interfere in the federal regulation of prediction markets first appeared on EGR Intel.
US President insists it is “critically important that the CFTC’s exclusive authority over prediction markets is maintained” in strongly worded Truth Social post
The post Trump warns “scum” not to interfere in the federal regulation of prediction markets first appeared on EGR Intel.