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Everything is political, right? And that now includes prediction markets. This whole issue is quickly spiraling into another Democrats vs. Donald Trump issue.
The sitting president seems to be a proponent of them and has a financial stake in their success (more on that later). Democrats, the haters of all things Trump likes, oppose it. Publicly, they say it because it makes everything a casino or it’s a market for insider trading. But privately, it might be as simple as hating it because it’s associated with the Trump family.
In the middle of this fight are sports betting apps, millions of consumers around the world, and the entire world of legalized betting. If it sounds like a mess, it’s because it is.
And things just got messier.
There’s a Democratic congressional group now coming after the Commodity Futures Trading Commission — the organization tasked with regulating prediction markets. If politicians can’t stop prediction motets directly, well, they’ll just move up the totem pole at the federal agency. Keep reading and we’ll tell you how things have escalated in this fight.
Democrats Think CFTC Has Gone Rogue
Representatives Dina Titus (Nevada), Rosa DeLauro (Connecticut), and Jared Huffman (California), all Democrats, sent a letter this week calling out the CFTC. Adressed to the agency’s Inspector General Christopher Skinner, they said want to know a host of things, including:
- the legal basis for the agency’s jurisdictional claims
- its decision to withdraw prior guidance on event contracts
- the impact on state and tribal gaming regulation
- consumer protection implications
- whether its litigation strategy represents an appropriate use of agency resources.
The Democrats come from two legalized betting states, and one non-legalized. Still, all three believe that prediction markets are sidestepping their state’s rules and regulations around gambling. Nevada wants to protect its largest corporations (the MGMs and Wynns of the world), while California betting prefers to stay tribal led, as is supposed to be the case.
The congressional group is raising alarm bells about why the agency has shrunk its team so much since Trump took office for the second time. And given the lower-than-usual resources, why choose to stand up for prediction markets over other matters?
The CFTC has countersued a number of states that have tried to ban prediction markets. Connecticut is one of those states, which is likely why DeLauro is part of this group. Lawsuits are also out for Arizona, New York, Wisconsin, and a few others.
You can see why Democrats could think the CFTC has external motivations, right? That motivation is largely influence from the Trump administration. Let us explain in the next section.
The CFTC Has A Trump Problem
You can be completely bipartisan and admit that prediction markets have become increasingly tied to Trump’s orbit.
Last year, Trump Media announced plans to launch prediction market products through a partnership with Crypto dot com. Obviously, there’s a built-in financial incentive right there. But it goes deep. Donald Trump Jr. serves as an adviser to Kalshi and separately has ties to Polymarket, the two biggest prediction market operators on the planet.
Making matters worse is that there’s been a rash of insider trading off Trump’s military actions in Venezuela and Iran this year. A U.S. soldier was indicted for it already. When asked about the situation in April, Trump quipped:
“I was never much in favor of it. I don’t like it conceptually. It is what it is. I’m not happy with any of that stuff.”
Read that quote, and then read a recent Truth Social post he made about the same topic.
“It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive. 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! Other Countries are after this new form of Financial Market, and we want to remain at the top.”
What a 180-degree shift in sentiment, eh? So again, you can be a bipartisan spectator out of all this, and raise an eyebrow at what’s happening in public. Trump is making conflicting statements, but very obviously, has ties to the industry through his company and namesake son.
And that’s exactly why Democrats keep bringing him up whenever this issue comes before Congress. But to be fair, prediction markets weren’t born under Trump. They existed before him and will likely exist after him. But they’ve undeniably exploded during his second administration. Every month, these platforms seemingly report record “trade volume.”
And that’s really the point here. Prediction markets are no longer some niche corner of the internet. They’ve become a multi-billion-dollar industry sitting at the intersection of gambling, finance, politics, and now even national security. Prediction markets have gotten too popular to ignore, and possibly too political to stay out of Washington’s crosshairs, as we’re seeing with this CFTC attack.
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