Trump Backs CFTC Exclusivity Over Prediction Markets — and Attacks Democratic Governors by Name
The federal government versus the states on the issue of the regulation of so-called “prediction markets” has taken a new turn. President Trump has come down on the side of the federal government in its assertion of an exclusive jurisdiction to regulate so-called “event contracts”, and used the opportunity to attack Democratic state governors by name.
The short version:
- President Trump posted on Truth Social Tuesday calling it “critically important” that the CFTC retain exclusive authority over prediction markets — and attacked Democratic governors attempting to restrict the platforms, calling them “SCUM”
- Trump named Letitia James (New York AG), Tim Walz (Minnesota Governor), and JB Pritzker (Illinois Governor) by name; former New Jersey Governor Chris Christie, a Republican, was also targeted for defending states’ rights to regulate gambling
- DraftKings’ in-house prediction market exchange DKeX launched the same day, going live with six CFTC-certified sports event contract templates
- Senator Chris Murphy (D-CT) fired back, saying Trump and his family have a personal financial interest in prediction markets — a claim Murphy has made publicly but which is not supported by disclosed financial records
- Murphy introduced the BETS OFF Act — Banning Event Trading on Sensitive Operations and Federal Functions — which would prohibit wagering on government actions and events where participants have advance knowledge or control over the outcome
- Most contracts currently offered on Kalshi, Polymarket, and DKeX would be prohibited under Murphy’s bill if it became law
The CFTC, under Chairman Michael Selig — currently the agency’s sole confirmed commissioner — has been filing federal lawsuits against states attempting to apply their own gambling laws to prediction market operators. Suits have been filed against Wisconsin, Connecticut, Arizona, and Illinois. The central legal question in each case is the same: do event contracts traded on CFTC-registered Designated Contract Markets fall exclusively under federal jurisdiction under the Commodity Exchange Act, or can states impose their own gambling laws and tax the contracts?
Trump’s post directly targeted three Democratic governors. Minnesota’s Tim Walz last week signed legislation making it a felony to operate or advertise a prediction market in the state. Illinois Governor JB Pritzker issued an executive order this month barring state employees from using nonpublic official information to trade the markets. New York Governor Kathy Hochul signed a similar executive order this week. Trump’s decision to name Christie alongside the Democratic officials is notable — the former Republican governor has repeatedly defended states’ rights to regulate prediction markets as gambling products.
Murphy’s BETS OFF Act joins at least four other prediction market bills introduced in the Senate since March, covering bans on government employee trading, prohibitions on military-action contracts, and outright restrictions on sports event contracts. The Senate voted unanimously in April to ban its own members and staff from participating in prediction markets at all. Murphy’s bill goes further than most, targeting the contract types themselves rather than the class of traders.
Connecticut Attorney General William Tong, whose office is one of the CFTC’s defendants, appeared on CNBC today and described the CFTC’s enforcement pattern — filing suits exclusively against states with Democratic attorneys general — as “clearly politically motivated.”
For operators, Trump’s intervention is a short-term positive. It reinforces the CFTC’s hand in ongoing federal litigation and signals continued executive branch protection for the DCM licensing framework. Whether that protection holds against a Congress moving in the opposite direction — and courts yet to deliver definitive rulings across all circuits — will define the industry’s regulatory picture over the next twelve months.
Sources
The Hill — Trump: ‘Critically important’ CFTC has exclusive authority over prediction markets (May 27, 2026) — https://thehill.com/homenews/administration/5896316-trump-cftc-prediction-markets/
CoinDesk — Trump Praises Prediction Markets, Defends CFTC As Court Cases Compound (May 26, 2026) — https://coindesk.com/policy/2026/05/26/trump-praises-prediction-markets-defends-cftc-as-court-cases-compound
Sports Betting Dime — Trump Calls For CFTC Exclusivity Over Prediction Markets (May 27, 2026) — https://www.sportsbettingdime.com/news/betting/trump-calls-for-cftc-exclusivity-over-prediction-markets/
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