Trump Administration Enters Prediction Market Legal Battle, CFTC Chairman States "We Will Not Stand Idly By"

On February 18, the Associated Press reported that the Trump administration has officially sided with prediction market operators Kalshi and Polymarket in their federal legal fight against state governments seeking to ban the platforms. Newly appointed U.S. Commodity Futures Trading Commission (CFTC) Chair Michael Selig wrote in a Wall Street Journal op-ed that the CFTC "will no longer stand idly by" and let state governments undermine the agency’s exclusive jurisdiction over these markets. He added in a video message: "We’ll see you in court." Lawsuits in states including Nevada have alleged Kalshi and Polymarket are effectively unlicensed sports betting operations, violating state laws. Selig, however, argues prediction market operations are no different from other futures contracts and fall under federal regulation. Notably, former President Donald Trump’s son Donald Trump Jr. has invested in Polymarket through his venture capital firm and serves as a strategic advisor to Kalshi. In response, Selig recently announced the creation of an "Innovation Advisory Committee" with members including CEOs of Polymarket, Kalshi, Coinbase, and Robinhood. The committee, however, lacks consumer protection organization representation, drawing criticism from some Republicans. Utah Governor Spencer Cox bluntly said: "These prediction markets are gambling, plain and simple."