US President Donald Trump on Tuesday used his social media platform to boost prediction markets – a burgeoning industry from which Trump’s family stands to profit – and lashed out at state leaders working to regulate them, singling out officials in Illinois, New York and elsewhere as “scum.”
Trump, whose administration is considered by some to be the most brazenly corrupt in US history, argued that the Commodity Futures Trading Commission (CFTC) must have “exclusive authority” over prediction market regulations, declaring that “it is a major industry, and we must protect it.” The president’s message echoed that of his CFTC chief, Mike Selig, who said earlier this year that the agency would fight any state-level efforts to restrict prediction markets.
Sen. Chris Murphy (D-Conn.), who is co-leading legislation that would ban online prediction markets from allowing bets on government actions, said Trump’s post on Tuesday amounts to “more evidence of how the corruption works.”
“Trump and his family are making tons of money off these new prediction markets—and so of course he is leading the charge against consumer protections and for preferential regulatory treatment of his companies,” said Murphy, alluding to Donald Trump Jr.’s role on the advisory board of Polymarket – the world’s largest prediction market platform.
The New York Times reported last month that Trump’s “publicly traded media company unveiled its own prediction market product last year. And the president’s eldest son, Donald Trump Jr., has ties to two of the industry’s top firms, including Polymarket, the platform that prosecutors say was used by the soldier for well-timed bets.”
“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 president’s attack on state efforts to regulate prediction markets drew swift pushback from state leaders who have supported cracking down on the platforms, warning they are avenues for insider trading and corruption.
“Illinois took action to prevent and ban insider trading with online prediction markets in our state,” Democratic Gov. JB Pritzker wrote on social media in response to Trump’s post. “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 Trump administration, which has steamrolled federal regulators who have raised questions about prediction markets, is currently suing Illinois and other states over their efforts to regulate the platforms. Critics argue that prediction markets are illegal sportsbooks masquerading as financial exchanges in an attempt to skirt gambling restrictions.
Dominick Freda, legal director of Better Markets, said Tuesday that “Congress never intended to unleash nationwide gambling and certainly did not envision having the tiny and ill-equipped CFTC adopt the role of nationwide gambling czar.” Better Markets on Tuesday filed an amicus brief in support of Tennessee’s effort to rein in Kalshi and other prediction market platforms.
“The CFTC continues to waste its resources and focus on cheerleading these unpoliced, unregulated casinos when it should focus on its real job: regulating the multi-trillion-dollar commodities and derivatives markets,” said Freda. “It is more important than ever for the CFTC to regulate and police those markets so that Americans can count on stable prices for the many goods they rely on, from gas to groceries. The CFTC should leave gambling regulation to Tennessee and the other states whose laws and regulations have protected the American public for decades, and must be allowed to continue to do so.”
