White House Reviews CFTC Prediction-Market Rule; Trump Backs It

The White House Office of Information and Regulatory Affairs has begun interagency review of a proposed Commodity Futures Trading Commission rule to formalize oversight of event contracts, often called prediction markets. The CFTC transmitted a notice of proposed rulemaking under Section 5c(c) of the Commodity Exchange Act to OIRA and said it will provide more information once the review is complete.

Event contracts allow traders to place bets on outcomes such as elections, sports results and geopolitical events. In March the CFTC issued guidance for exchanges on how to list those contracts, instructing designated contract markets to block listings that are “readily susceptible to manipulation” or abusive trading.

The agency’s recent actions followed probes into suspicious trades tied to U.S. elections and military actions. Those inquiries have included questions about possible insider trading.

CFTC Chair Michael Selig has sued five states-Wisconsin, Illinois, Arizona, Connecticut and New York-that have sought to restrict or ban platforms such as Kalshi and Polymarket. State officials argue the platforms violate local gaming and gambling laws, including statutes related to sports betting. The competing jurisdictional claims are now pending in federal court.

President Donald Trump posted on X that the issue is “critically important” and backed Selig’s effort to secure exclusive federal authority. In the same post he criticized several state officials, writing, “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!”

Illinois Governor J.B. Pritzker responded on the platform, saying the state acted to “prevent and ban insider trading” and accusing the president of seeking to block state regulation. “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,” the governor wrote.

Donald Trump Jr. has invested in Polymarket through venture firm 1789 Capital and serves as a strategic advisor to Kalshi.

Jaret Seiberg, managing director at TD Cowen's Washington Research Group, wrote that the dispute will be resolved by federal courts and statutory interpretation rather than by regulator or executive branch statements.

OIRA’s review is part of the standard interagency process for significant rules. The CFTC has said it will comment after that review concludes. Exchanges that list event contracts remain under review by federal and state authorities while litigation and enforcement actions proceed.