White House reviews CFTC prediction-market rule as Trump backs federal control

Federal authority on the line

President Donald Trump publicly backed the CFTC's authority over prediction markets, calling it critically important that the agency retain exclusive authority over the sector. This public endorsement comes as the White House formally reviews the CFTC's proposed rule, a process that typically precedes formal publication and public comment periods.

The stakes are high. Kalshi and the CFTC have countered that designated contract markets regulated under federal commodities law fall under the CFTC's exclusive authority, positioning the agency as the sole regulator of platforms that allow users to trade contracts on real-world events. Polymarket and similar event-contract platforms operate in this regulatory gray zone, and a federal framework could clarify their status—or constrain their operations.

States push back on federal reach

Illinois, New Jersey and other states have argued that sports-linked event contracts effectively function as online betting markets, not commodities. This challenge to CFTC jurisdiction reflects a broader tension: whether prediction markets are financial instruments under federal commodities law or gaming products that should be regulated at the state level.

What comes next

The proposal follows a March advance notice of proposed rulemaking in which the CFTC sought public comment on which prediction market contracts may be prohibited as contrary to the public interest, including contracts tied to elections, gaming, and sports. The White House review doesn't set a deadline, but it signals that a formal rule is coming—one that could reshape how Kalshi, Polymarket, and other platforms operate.