Trump backs CFTC chair on federal oversight of prediction markets

President Donald Trump publicly backed Commodity Futures Trading Commission Chair Michael Selig on Truth Social, saying the CFTC should keep exclusive federal authority over prediction markets. The post reiterated support for Selig’s legal and regulatory campaign.

Selig, the agency’s sole leader, has filed lawsuits against Wisconsin, Illinois, Arizona, Connecticut and New York, arguing that the CFTC has exclusive jurisdiction over prediction platforms. The agency has also opened a formal rulemaking process to set federal standards for these markets.

States named in the litigation contend some prediction platforms operate like gambling sites and must follow state gaming and betting laws. State officials have raised particular concerns about markets that allow sports-related wagers, saying those offerings fall under state gambling statutes rather than federal derivatives law.

Operators of platforms such as Polymarket and Kalshi offer markets where users buy and sell contracts tied to outcomes of political events, economic indicators, weather and other real-world events. These contracts can resemble regulated derivatives, a classification the CFTC contends places them under federal oversight.

The CFTC’s rulemaking docket proposes a federal framework for licensing, reporting and consumer-protection requirements for prediction markets. Selig’s legal filings seek court rulings that would confirm the agency’s exclusive authority and could block states from enforcing their own laws against those platforms.

Some state attorneys general and gaming regulators argue the CFTC’s approach would preempt longstanding state laws designed to police betting and protect consumers. Industry participants and several legal scholars have argued a clear federal rule could provide uniform standards, while others say Congress should decide the balance between state and federal authority.

An investigative report released recently said career officials who raised compliance concerns about certain prediction and crypto-related firms were removed or faced retaliatory actions. Connecticut Senator Richard Blumenthal posted on social media that the agency had become a tool for prediction market and crypto interests and criticized its handling of staff who raised enforcement concerns. The CFTC has not provided a detailed public response to the personnel allegations.

Trump’s public endorsement gives Selig a visible political boost as the litigation proceeds and rulemaking continues. Pending court decisions and any congressional action will determine whether prediction markets come under federal commodities law or remain largely subject to state regulation.