TLDR The Trump administration’s CFTC is backing prediction markets Kalshi and Polymarket against state bans Nevada sued Kalshi after a federal appeals court rejected its request to pause state enforcement CFTC Chairman Michael Selig argues prediction market contracts are federal derivatives, not gambling Donald Trump Jr. has invested in Polymarket and is a strategic advisor for Kalshi, raising conflict of interest questions Several states including Nevada, Massachusetts, and Tennessee have filed lawsuits or cease-and-desist orders against these platforms
The Trump administration has taken sides in a growing legal fight over whether prediction markets like Kalshi and Polymarket are financial products or illegal gambling.
The CFTC is now actively asserting federal jurisdiction over prediction markets, filing an amicus brief to preempt state-level challenges.
Over 50 states are currently suing platforms like Kalshi, Polymarket, and Crypto. com, framing them as unregulated gambling.
CFTC Chair… pic.twitter.com/ZBQ7DGbGx4
— Seer (@seer_pm) February 19, 2026
The Commodity Futures Trading Commission (CFTC), under new Chairman Michael Selig, filed a legal brief supporting federal oversight of prediction markets. Selig argues that state governments cannot ban platforms that are already regulated at the federal level.
The dispute centers on whether event contracts — where users buy and sell positions on the outcome of real-world events — count as financial derivatives or as sports betting.
Kalshi and Polymarket allow users to trade contracts priced between one cent and 99 cents. The price reflects the market’s estimated probability that an event will occur, from sports results to weather to political outcomes.
Around 90% of Kalshi’s trading volume comes from sports-related contracts. Polymarket sees roughly half of its volume in sports markets. Kalshi reported over $1 billion in trading volume during the Super Bowl alone.
Nevada has been the most aggressive state in pushing back. The