Prediction markets regulation by CFTC eyed by White House

A proposal for the Commodity Futures Trading Commission to regulate prediction markets such as Kalshi and Polymarket is under review by the White House, a filing from Tuesday shows.

Details of the proposal, which are being reviewed by the Office of Management and Budget, are not visible on the filing.

CNBC has requested comment from the CFTC on the filing, which Bloomberg reported earlier Wednesday.

A spokeswoman for Kalshi had no comment on the filing. Polymarket did not immediately respond to a request for comment.

CFTC Chairman Michael Selig on Jan. 29 said the agency planned to write rules for governing prediction markets as he scrapped a proposed rule that would have prohibited trades on sports and politics on those platforms.

The agency has argued in public statements and in courts that it has exclusive authority to regulate the growing prediction market sector, rather than individual states, some of which are seeking to exercise such authority.

Tuesday’s filing came on the same day that President Donald Trump, in a social media post, said, “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!” Trump wrote. “Other Countries are after this new form of Financial Market, and we want to remain at the top,” he wrote.

All of those named elected officials have been targets of Trump’s vitriol for other reasons previously as well.

Christie, a former New Jersey governor, is a strategic advisor to the American Gaming Association, which opposes prediction markets being allowed to offer contracts on sporting event outcomes.

Prediction markets “are clearly illegal in the sports gaming space,” Christie told CNBC’s Contessa Brewer in an interview in December 2025.

He said it is up to individual states to determine whether to allow sports betting on authorized platforms and to regulate their business.

James, who is New York’s attorney general, in April sued Coinbase and Gemini, for what her office said was “illegally running gambling operations in New York through their so-called ‘prediction market’ platforms.” She is also part of a consortium of state attorneys general supporting Massachusetts’ lawsuit against Kalshi for offering sports contracts to its residents in alleged violation of state gambling laws.

Walz, the governor of Minnesota, last week signed the nation’s first ban of prediction markets by an individual state. Illinois Gov. Pritzker, in April, signed an executive order banning state officials and employees from wagering on prediction markets with confidential information.

On Sunday, The New York Times published an article with the headline “How Prediction Markets and Crypto Firms Steamrolled a Watchdog Agency,” about the CFTC.

The article detailed how, “Three companies — each with ties to the Trump family’s business empire — needed the Commodity Futures Trading Commission to bless their ambitions in the white-hot field of prediction markets.” The firms the New York Times referred to are Crypto.com, Polymarket and Gemini Titan, an offshoot of Gemini.

The article said that despite concerns by senior career officials at the CFTC about different issues related to those firms, “Caroline D. Pham, then acting chairman of the commission, and her senior counsel intervened to help the firms get what they wanted, according to people familiar with the situation who spoke on condition of anonymity for fear of repercussions.”

CNBC has asked the CFTC for comment on the article.

Gary Gensler, the former chairman of both the CFTC and the Securities and Exchange Commission, told CNBC’s “Squawk on the Street” on Wednesday that despite the CFTC’s current claims, the agency is not authorized under the 2010 Dodd-Frank Act to regulate prediction markets.

Gensler said that states, not the CFTC, should regulate those markets.

“Congress can sort that out if they want to change it, but I would say I don’t think that the CFTC then in 2010, or now in 2026, has the … capacity” to oversee prediction markets, he said. “It’s a smaller agency now than it was 15 years ago, and the capital markets have grown significantly.”

“And, my gosh, it’s going to be … regulating sports contracts, gaming betting contracts on whether a particular basketball player gets a three-point play in the third quarter or not? I don’t think that’s its expertise.”

“Its expertise is wonderful, but it’s narrow and targets the institutional public hedging risk in farm products, energy products and interest rate products,” Gensler said.

He predicted that the dispute over whether the CFTC or individual states have the power to regulate prediction markets will end up being decided by the Supreme Court.

Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.