WASHINGTON — A Trump administration effort to set ground rules for the fast-growing prediction market industry is running into a wall of opposition, with former lawmakers, Native American tribes, traditional casinos, and consumer advocates all pushing back against the plan.
The backlash centers on a proposal released last month by the U.S. Commodity Futures Trading Commission, which would draw moral lines around certain types of bets available on prediction market platforms. These platforms let users place yes-or-no wagers on outcomes ranging from sports results and elections to economic indicators and stock market indices.
Under the proposal, the CFTC would prohibit bets tied to activities identified in federal law as off-limits — including crime, terrorism, assassination, war, and gambling — on the grounds that some of these fall outside the “public interest.” At the same time, the agency would generally allow sports wagering to continue on platforms such as Kalshi and Polymarket. Bets based on scores, win-loss outcomes, and tournament standings would likely be permitted, while wagers tied to player injuries, fighting, children’s sports, and refereeing decisions would likely be barred. Representatives from Kalshi and Polymarket did not respond to requests for comment.
President Donald Trump and his administration have broadly supported the prediction markets industry, fighting legal battles nationwide to assert that federal law permits registered markets to offer event contracts — a type of financial derivative — and that state governments cannot interfere.
But critics say the CFTC was never meant to serve as a gambling regulator. Christopher Dodd, the former Democratic U.S. senator who co-authored the landmark 2010 law that granted the CFTC authority over certain derivative contracts, said Congress had no such intention when it passed that legislation.
“At the time Congress passed Dodd-Frank, we were well aware of existing federal laws regulating gaming,” Dodd wrote in his public comment. “We had no intention of amending those laws.”
Former CFTC Chairman Timothy Massad also weighed in sharply, writing that the agency “has lost its way.” “Although I have not submitted comments on any rule proposal since leaving the agency, I feel it is important to do so here because the agency has lost sight of its mission and the limits of its own authority,” Massad said.
Native American tribes, brick-and-mortar casinos, and local officials across 20 states are also opposing the proposal, arguing that sports wagering on prediction market platforms amounts to illegal gambling that should be regulated at the state and local level. Sports prediction markets are already blocked in states including Nevada and Michigan.
The CFTC is not working under any set deadline to issue a final rule, but the agency will take the public comments into consideration as it moves forward.
