President Donald Trump on Tuesday stressed the importance of establishing the Commodity Futures Trading Commission\u2019s \u201cexclusive authority\u201d over prediction markets and vowed to protect the cryptocurrency industry.<\/p>\n\n\n\n
\u201cIt is critically important that the CFTC\u2019s exclusive authority over Prediction Markets is maintained, and that they will thrive,\u201d Trump wrote on Truth Social. \u201cUnder my leadership, we are setting \u2018rules of the road\u2019 that are the Gold Standard for the States.\u201d<\/p>\n\n\n\n
\u201cOther Countries are after this new form of Financial Market, and we want to remain at the top,\u201d he said.<\/p>\n\n\n\n
\u201cLikewise, and even more importantly, where we are currently the Crypto (Bitcoin, etc.) Capital of the World, other Countries are trying diligently to replace us in that capacity, but we won\u2019t let that happen.\u201d<\/p>\n\n\n\n
Trump vowed to safeguard the interests of prediction markets and crypto after The New York Times published a major investigation Sunday. It revealed that the CFTC has helped advance prediction markets \u201cat virtually every turn\u201d while softening regulatory enforcement of digital currencies \u2014 including by culling the commission\u2019s ranks and sidelining career officials.<\/p>\n\n\n\n
Trump and his family have financial ties to both the prediction market industry and several lucrative crypto ventures, including a crypto company, World Liberty Financial.<\/p>\n\n\n\n
Trump\u2019s eldest son, Donald Trump Jr., has ties to Kalshi and Polymarket, the two most prominent platforms in the event-contract betting industry.<\/p>\n\n\n\n
As prediction markets come under increased scrutiny from states that accuse them of operating as unlicensed casinos in violation of state gaming laws, their future largely rests on who ultimately has jurisdiction over the markets and the legal right to regulate them.<\/p>\n\n\n\n
It\u2019s a fierce debate underway in Washington and in statehouses across the country.<\/p>\n\n\n\n
On one side, Trump and his allies at the CFTC argue that prediction markets are just that \u2014 markets \u2014 and should be regulated at the federal level like securities markets and commodities markets.<\/p>\n\n\n\n
On the other side is a growing number of governors and state attorneys general from both political parties who argue that event contract betting \u2014 especially on sports \u2014 is just gambling by another name and should be regulated at the state level just like casinos and lotteries are.<\/p>\n\n\n\n
Minnesota Gov. Tim Walz, a Democrat, signed a law last week that would ban prediction market sites from operating in the state \u2014 a first-of-its-kind piece of legislation in the country. The Trump administration responded by suing to assert the CFTC\u2019s authority over the state.<\/p>\n\n\n\n
Trump called out Walz in his post Tuesday, along with a handful of state-level officials who have moved to regulate prediction markets this year, including New York Attorney General Letitia James.<\/p>\n\n\n\n
James, Trump\u2019s longtime political and legal foe, sued two crypto firms, Coinbase and Gemini, recently, alleging they were \u201crunning gambling operations\u201d in the state through their prediction market platforms.<\/p>\n\n\n\n
The companies say they are regulated at the federal level, not by the states.<\/p>\n\n\n\n