President Donald Trump has eased his tone on prediction markets only days after criticizing their rapid rise. Speaking to reporters in Florida on Saturday, he said some highly knowledgeable people support these platforms, even though he stopped short of offering full backing himself.
“I don’t know. I know some people who are very smart. They like it,” Trump said, adding that those people disagree but still favor the products. He also pointed to activity overseas, saying many other countries are already using prediction markets and warning that the United States could be left behind if it stays out.
Trump keeps his reservations but shifts emphasis
The change in tone stands out because earlier in the week, at the White House, Trump sounded much more critical. Asked about well-timed bets connected to geopolitical events, he said the world had, unfortunately, become something of a casino. He then made clear that he did not support the idea in principle, even if it had already spread. “I don’t like it conceptually, but it is what it is,” he said at the time.
That leaves Trump in a mixed position. He is still openly uneasy with the concept, yet he is also acknowledging support from sophisticated participants and the pressure created by adoption outside the U.S.
Trading volumes hit a monthly record
The policy debate is unfolding as the sector posts rapid growth. Data from Token Terminal showed that Polymarket and Kalshi together recorded $23.6 billion in trading volume in March, the highest monthly total on record. As volumes climb, prediction markets are drawing more scrutiny from regulators, courts, and state authorities.
The central dispute is straightforward: platform operators argue that event contracts belong under federal commodities law, while a number of state officials say the products are effectively a form of wagering.
CFTC asserts federal authority as states push back
On the federal side, the Commodity Futures Trading Commission has sued in the U.S. District Court for the Southern District of New York, arguing that federal law gives it exclusive authority over event-based contracts listed on registered exchanges. CFTC Chair Michael Selig said registered exchanges have been hit by a wave of state lawsuits aimed at limiting Americans’ access to event contracts and challenging the agency’s sole jurisdiction over prediction markets.
New York has taken the opposite view. The state has moved against Coinbase and Gemini over alleged violations of state gambling rules and has also targeted parts of Kalshi’s sports-related offerings. Court filings show that 37 states and Washington, D.C. have backed similar arguments, saying federal financial law was not designed to allow nationwide sports betting without state oversight.
Wisconsin broadens the legal fight
Wisconsin has widened that pressure by filing complaints in Dane County against several firms, including Crypto.com, Polymarket, and Kalshi, along with distribution partners Coinbase and Robinhood. Prosecutors said users take positions on real-world outcomes with fixed payouts, a structure they argue meets the legal definition of wagering under state law.
Attorney General Josh Kaul put it bluntly: “Thinly disguising unlawful conduct doesn’t make it lawful.” Similar enforcement action has appeared in Nevada, Massachusetts, and Illinois, where regulators have issued bans, lawsuits, or cease-and-desist orders tied to event contracts.
Across those cases, court documents describe contracts linked to sports and elections as indistinguishable from betting. Platform operators continue to argue the opposite and maintain that their products fall within the federal commodities framework.
Business links around the sector are also under review
Attention has also turned to corporate ties as the market grows. Donald Trump Jr. joined Polymarket’s advisory board after investing in the platform in August. He later accepted a similar role at Kalshi in January 2025.
Trump Media announced in October that it planned to launch prediction market products on Truth Social in partnership with Crypto.com. After taking office, Trump transferred his stake in Trump Media to a trust, with Donald Trump Jr. named as the sole trustee.
Prediction markets in the U.S. are now expanding on one track and facing legal resistance on another. Trump’s latest comments soften the political rhetoric, but the conflict between federal oversight claims and state enforcement is still widening.