US Prediction Market Showdown: White House Reviews New Federal Rules as Trump Backs CFTC

The regulatory battle over prediction markets in the United States is intensifying, with the White House now actively reviewing new regulations proposed by the U.S. Commodity Futures Trading Commission (CFTC). This move comes swiftly after former President Donald Trump voiced strong support for the federal government’s absolute jurisdiction in this burgeoning sector. The impending rules are set to significantly reshape the operational landscape and legal standing of prominent prediction platforms like Polymarket and Kalshi across the country.

According to official records on RegInfo.gov, the White House Office of Information and Regulatory Affairs (OIRA) formally received and commenced its review of the CFTC’s proposed rule, specifically designated for “Prediction Markets,” on May 26th. This process is being conducted under Executive Order 12866. While the review is underway, the comprehensive details of the proposed regulations have not yet been publicly disclosed.

This critical step is widely interpreted as the CFTC’s strategic move to establish a more unified federal regulatory framework for “event contracts.” Over recent months, prediction markets, particularly those centered around sports events and political elections, have become the flashpoint for a fierce legal and political struggle within the U.S.

Several state governments, including Illinois and New Jersey, have vociferously argued that event contracts tied to sports are fundamentally akin to “online gambling” and, as such, should fall under the purview of individual state gaming laws. Conversely, the well-known prediction market platform Kalshi, backed by the CFTC itself, has pushed back forcefully. They assert that these contracts qualify as “Designated Contract Markets (DCMs)” regulated by federal commodity law, firmly placing them within the CFTC’s jurisdiction.

Under the existing U.S. federal system, Executive Order 12866 outlines the stringent review mechanism for all significant federal regulations before their official implementation. It mandates that federal agencies submit major regulations for a thorough assessment of their economic impact and policy implications. The OIRA, an integral part of the White House Office of Management and Budget (OMB), is the principal body responsible for overseeing this rigorous review process.

The timing of this review is particularly noteworthy. Just days prior, Donald Trump publicly endorsed the CFTC’s absolute jurisdiction over prediction markets. In his post, he characterized the issue as “vital,” emphasizing the necessity for the CFTC to maintain “exclusive jurisdiction” in this evolving domain and firmly reject any attempts by state governments to implement fragmented regulations.