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commodities futures trading commission
'Lawlessness': Trump Agency Instructs Prediction Market Giant Kalshi to Defy Federal Court Order
One critic said the Commodity Futures Trading Commission's "cheerleading for prediction markets truly knows no bounds."
Aug 13, 2026
Consumer advocacy groups are accusing the Trump administration of engaging in "lawlessness on behalf of well-connected gambling interests" after the Commodity Futures Trading Commission instructed the prediction market giant Kalshi to continue operating in New York, in defiance of a federal court order.
In a Tuesday statement, the CFTC said it "exercised its emergency authority" and "ordered" Kalshi to "continue to operate in accordance with the Commodity Exchange Act’s Core Principles." The statement came weeks after a federal judge denied Kalshi's bid to prevent New York from enforcing its gambling laws against the platform, which allows users to "trade on the outcome of real-world events." The CFTC's action also came after New York sued Kalshi for allegedly "running an illegal gambling operation."
Benjamin Schiffrin, director of securities policy for the advocacy group Better Markets, said in a statement that it appears the CFTC "believes that the law does not apply to it."
"Now that New York has sued Kalshi to prevent it from circumventing state gambling laws, the CFTC has directed Kalshi to continue to operate even if a court enjoins it from doing so," said Schiffrin. "This is not the first time the CFTC has directed Kalshi to violate a court order. It did so after a Michigan state court ordered Kalshi to void, cancel, and refund some bets. The CFTC is now directing Kalshi to violate the orders of a federal court. Its cheerleading for prediction markets truly knows no bounds."
New York's lawsuit, filed late last month, seeks a court order stopping Kalshi from "operating as an unlicensed gambling business and requiring the company to pay fines, forfeit all illegal gains, and pay restitution to users."
The CFTC, headed by Trump-appointed Chairman Michael Selig, has launched a sweeping effort to prevent states from regulating prediction markets, arguing the federal agency has sole regulatory authority over the platforms. States have pushed back, accusing the CFTC of exceeding its powers.
In a statement on Wednesday, Public Citizen's Tyson Slocum called the CFTC's intervention on behalf of Kalshi in New York "a massive overreach."
“After the federal court rejected gambling platform Kalshi’s request to continue offering gambling products to New Yorkers while the state challenged their legality, the CFTC has swooped in, declaring a phony emergency, and issued an order allowing Kalshi to defy federal courts and a US state," said Slocum. "The Commodity Exchange Act should not permit such gambling platforms, and until there is reasonable and lawful regulation at the federal level, states should be the ones—not the CFTC—making the decisions on how to regulate gambling.”
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Senators Urge Regulator to 'Crack Down on Prediction Markets' Amid Wildfire Betting
"These markets risk creating perverse incentives, undermining public trust, and commodifying human suffering in ways that warrant careful scrutiny."
Aug 04, 2026
As wildfires ravaged large swaths of the Western US, a group of Democratic senators on Monday called on federal regulators to rein in prediction markets offering contracts tied to such disasters, warning that turning climate-fueled extreme weather into financial wagers creates "perverse incentives" that could motivate arson and other crimes.
In a letter to Commodity Futures Trading Commission (CFTC) Chair Michael Selig, Sens. Jeff Merkley (Ore.), Alex Padilla (Calif.), Jeanne Shaheen (NH), Adam Schiff (Calif.), Jacky Rosen (Nevada), Catherine Cortez Masto (Nevada), Martin Heinrich (NM), Ron Wyden (Ore.), and Amy Klobuchar (Minn.) wrote that "prediction markets have been enabled to expand rapidly, increasingly inviting speculation on war, political violence, disasters, and public emergencies that raise ethical and public policy concerns."
"These markets risk creating perverse incentives, undermining public trust, and commodifying human suffering in ways that warrant careful scrutiny," the lawmakers continued. "Recent public reports have highlighted how Polymarket—the largest prediction market platform in the world—accepted more than $1.2 million in bets surrounding the Palisades and Eaton fires in January 2025. These fires devastated the Los Angeles area, claiming the lives of 31 people and destroying more than 16,000 structures."
"Offering bets on destructive wildfires threatens to minimize communities’ suffering all so the rich and powerful can profit," the letter argues. "There’s also the heightened risk—according to state and local fire officials—that individuals could be tempted to commit arson in order to make sure their bets are successful."
"By offering contracts on fires, prediction market sites run the risk of encouraging people to influence fires that have already started, creating additional concerns around public safety and insider trading," the senators added.
The CFTC controversially considers Polymarket and Kalshi designated contract markets (DCMs)—over which the federal agency has control versus state gambling regimes—and is currently developing nationwide rules.
The letter's signers asked Selig:
- Is the CFTC considering prohibiting DCMs from offering event contracts on wildfires as part of the rulemaking process currently underway, given they are against the public’s interest?
- Does the CFTC have any plans to curb bets on wildfires on prediction markets in the United States?
- Does the agency have plans to address these contracts being offered on offshore markets?
- Does the CFTC believe event contracts offered on the following wildfire-related events are in the public interest?
- Does the commission have guidance or planned enforcement related to these wildfire event contracts?
"As the United States faces yet another record-breaking fire season this year, the [CFTC] cannot allow these prediction markets to offer unrestricted betting on wildfires," the senators stressed. "While these bets appear to be offered only on the offshore Polymarket site, it is only a matter of time before other US-based designated contract markets try to offer these. The CFTC must lead the charge to rein in these contracts in the US and offshore and put in place commonsense guardrails to prevent people from profiting as wildfires threaten communities."
In addition to wildfires, Polymarket users can place wagers related to earthquakes, hurricanes, and volcanic eruptions.
Polymarket responded to the senators' letter in a statement to Claims Journal saying, "When tragedy unfolds, people turn to the news for commentary and to Polymarket for information.”
"While we recognize the risks associated with these markets, removing them does not prevent a tragedy," the company added. "It only makes timely, market-based information less accessible to those seeking to understand what may happen next.”
The senators' letter came days after Democratic New York Attorney General Letitia James announced a lawsuit targeting Polymarket competitor Kalshi for operating as “an illegal gambling operation" in "flagrant disregard” for the Empire State’s “Constitution, penal laws, and other statutes.”
Last month, a coalition of consumer advocacy groups condemned the CFTC's attempt to allow platforms like Kalshi and Polymarket “a green light to bypass state gambling regimes.”
“Calling a sports wager an ‘event contract’ does not transform it into a legitimate tool for managing economic risk,” said Eric Naing, communications director for Demand Progress Education Fund, one of the groups decrying the regulator's approach to such companies.
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With No Sense of Irony, Trump Rep Calls Teleprompter Operator's Alleged Insider Trading on Speeches a 'Disgrace'
"Public Citizen again calls on the CFTC to wake up and do its job of overseeing the prediction market industry and enforcing the insider trading laws," said the watchdog's government affairs lobbyist.
Jul 16, 2026
As Kalshi confirmed Thursday that it referred a White House teleprompter operator to federal regulators for flagged bets on its prediction market, President Donald Trump's press secretary denounced the suspended staffer's reported actions—without addressing any of the mounting outrage over how her boss has cashed in on his return to the Oval Office.
Citing unnamed sources, ABC News reported that Gabriel Perez, who has been one of Trump's teleprompter operators since his first presidential campaign, is in talks with federal regulators at the Commodity Futures Trading Commission (CFTC) "to settle allegations he used his inside knowledge of the president's speeches to win more than $100,000."
"Of all Trump's closest aides, sources say Perez typically has the final eyes on nearly all of the president's prepared remarks—and is often known to take last-minute edits from Trump himself," the outlet detailed. Federal investigators reportedly found that Perez bet on words or topics mentioned by Trump in more than a dozen speeches.
While the CFTC declined to comment, Robert DeNault, Kalshi's head of enforcement, told multiple media outlets that "our surveillance team promptly flagged and referred these trades to the CFTC after an exchange investigation. We have been assisting regulators on this matter and provided evidence we collected, as we do in any referral."
Asked about the insider trading allegations on Thursday—just hours before Trump was set to deliver a prime-time address on election security—White House Press Secretary Karoline Leavitt told reporters that Perez has been put on unpaid administrative leave, at the direction of the president himself, and called his reported behavior a "disgrace."
"The White House has extremely strict ethical guidelines with respect to issues like this," Leavitt also claimed.
As National Public Radio detailed Thursday:
In March, White House staff received a memo warning against using nonpublic government information to place bets on Kalshi and its biggest competitor, Polymarket.
The memo, which was reviewed by NPR, stated that it is a criminal offense for anyone inside the White House to "buy" or "sell" on the sites. Prediction markets offer "yes" or "no" contracts that change in price based on the speculation of bettors. Aides in the White House were told in the memo that misusing government information "is a very serious offense and will not be tolerated."
The US Department of Justice this year has charged at least two people for their use of Polymarket: US Army special forces soldier who allegedly gambled on the abduction of Venezuelan President Nicolás Maduro, and a Google software engineer accused of using internal company information to place bets; they've both pleaded not guilty.
However, in the case of Perez, "the CFTC alerted federal prosecutors in Manhattan, who declined to open a criminal investigation," according to ABC News. Instead, he's discussing a potential settlement that would require him "to give back his profits and refrain from making similar trades."
Responding to the reporting in a Thursday statement, Craig Holman, government affairs lobbyist at the watchdog group Public Citizen, noted that "betting on political events on the prediction markets has become highly profitable for a small handful of anonymous bettors."
"Ever since the American invasion of Venezuela and Iran, a few people have been placing very large bets moments before the events take place, and scoring millions in profits," he emphasized. "The timing and accuracy of these bets strongly suggest insider trading, probably by a few individuals in the know within the Trump administration."
The reported behavior by Perez "is further evidence of illegal insider trading on the prediction markets—an industry that the Commodity Futures Trading Commission has let operate like the Wild West," Holman continued. "Public Citizen again calls on the CFTC to wake up and do its job of overseeing the prediction market industry and enforcing the insider trading laws."
The New York Times reported in May that the Trump administration has stacked CFTC with industry insiders who have systematically "mowed down" staffers interested in providing oversight on prediction markets like Polymarket and Kalshi.
Meanwhile, according to recently unveiled annual financial disclosures, Trump made an unprecedented $2.2 billion—more than half of it from his family's cryptocurrency exploits—during his first year back in the White House.
Based on those disclosures, Trump may have finally "crossed a line that even the presidency cannot erase, violating the nation's insider trading laws," Sen. Ed Markey (D-Mass.)—who helped write those laws—highlighted in a Wednesday blog post.
Trump—who infamously bankrupted multiple Atlantic City casinos—also has plans to get into prediction markets. His social media company, Trump Media and Technology Group, said last October that it would soon launch a prediction betting marketplace on Truth Social.
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Report Exposes How Trump Administration Has 'Mowed Down' Regulators Overseeing Prediction Markets
The Trump administration last week sued Minnesota after it passed a law banning prediction markets from operating in the state.
May 24, 2026
A Sunday report in The New York Times revealed how the Trump administration is using a key government agency to shut down any efforts to regulate online betting markets such as Kalshi and Polymarket.
According to the Times, the administration has stacked the Commodity Futures Trading Commission (CFTC) with industry insiders who have systematically "mowed down" staffers at the agency who have expressed interest in providing oversight on prediction markets.
Among other things, the report documented how multiple officials at CTFC have been put on leave simply for asking questions about the betting markets' ties to members of President Donald Trump's family or for having past experience enforcing regulations related to cryptocurrencies.
What's more, the Times found that even being an industry insider isn't enough to guarantee good standing in the agency. Brian Quintenz, who was tapped by Trump to lead CTFC last year, saw his nomination withdrawn after he drew the ire of Cameron and Tyler Winklevoss for refusing to support their cryptocurrency exchange's complaint against the agency.
Revelations about industry insiders rolling over regulators at CTFC come as the Trump administration is fighting any attempts by states to regulate prediction markets.
As explained in a Thursday report from CNBC, the Trump administration is "fighting a multi-front battle to stop the state actions and assert its regulatory authority," with CTFC arguing that it is "the only entity that can regulate" betting platforms.
16 different states are engaged in legal proceedings against the platforms, and Minnesota last week passed a law to ban them outright, which immediately drew a lawsuit from the administration.
The new Minnesota law, which is scheduled to take effect in August, bans prediction markets "from hosting, creating or advertising in the state," according to ABC News.
In an interview with ABC, Minnesota state Rep. Emma Greenman (D-63B) said she authored the legislation because she has grown increasingly concerned about young people in the state seeing their finances drained from placing online bets.
"We're seeing studies come out that say [the companies] are targeting 18- to 21-year-olds," said Greenman, "and we are seeing gambling starting younger and younger."
CFTC Chair Michael Selig last month warned states against trying to regulate prediction markets, which he said would "circumvent the clear directive of Congress."
"Our message to Wisconsin is the same as to New York, Arizona, and others," said Selig. "If you interfere with the operation of federal law in regulating financial markets, we will sue you."
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'Patently False': Trump Official Blasted Over Claim That CFTC Has Power to Oversee Prediction Markets
The Trump family stands to make big money from the total deregulation of “prediction markets.” A key official now claims they can only be overseen by a federal agency in bed with industry CEOs.
Feb 20, 2026
As President Donald Trump plans to profit from his own "prediction" betting app, his administration is claiming that sole regulatory oversight of the burgeoning gambling industry belongs to an agency advised by executives from the multibillion-dollar betting companies themselves. Critics say it's totally illegal.
On Tuesday, Mike Selig, the chair of the Commodities Futures Trading Commission (CFTC), announced that the agency had filed a brief attempting to fight "an onslaught of state-led litigation" against companies like Polymarket, Kalshi, Crypto.com, and other apps.
States have alleged that these apps—which allow users to earn money by making accurate predictions on sports and other events—should be regulated similarly to gambling apps, which are subject to licensing requirements, age restrictions, and tax obligations.
But the brief filed by Selig asserts that the CFTC, which has much looser regulations, has "exclusive jurisdiction" over the prediction apps, which he referred to as "derivatives markets"—a term for venues where people trade financial contracts backed by stocks, bonds, or commodities.
"American prediction markets aren’t new. They have been regulated by the CFTC for more than two decades and serve legitimate economic purposes," he said. "These markets have changed the way people consume news, monitor events, [and] engage in politics, and can be more accurate than competing products."
"Congress gave the CFTC comprehensive authority over any contract based on a commodity, and the legal definition of a commodity is very broad," he continued.
Being regulated by CFTC is an obvious boon to the betting companies, because it essentially means they'll be regulating themselves.
As The Lever noted, Selig's statement came just days after he'd "recruited top executives from those same companies—including leaders from Polymarket, Kalshi, Crypto.com, DraftKings, and FanDuel—to help advise regulators on how to 'develop clear rules of the road for the Golden Age of American financial markets.'"
It's not merely a corporate giveaway, but also an apparent act of brazen self-dealing for the Trump family, whose media company just months ago partnered with Crypto.com to launch its own prediction platform called "Truth Predict."
It just so happens that Crypto.com's parent company also donated $30 million to Trump's super PAC in 2025. Meanwhile, Donald Trump Jr. is an investor and unpaid adviser to Polymarket and a paid adviser to Kalshi.
Prediction betting apps, which allow users to make money predicting political events, have faced accusations of insider trading from those who may have foreknowledge of the Trump administration's activities.
In January, a user created a new account and bet $32,000 that Venezuelan President Nicolás Maduro would be out of power by the end of the month. Within hours, Trump had launched an operation to kidnap the president, netting the user a $436,000 payday.
Just days later, White House press secretary Karoline Leavitt drew suspicion when she abruptly looked up at the clock and ended a press conference just seconds before a Kalshi bet marked it to conclude, which allowed those who bet it would not go over time to win 50 times what they'd wagered. The White House denied any insider trading, calling it "100% Fake News."
While prediction markets have become the toast of the Trump administration, the push for near-total deregulation has even some Republicans worried.
Senate Agriculture Chair John Boozman (R-Ark.), whose committee oversees the CFTC, said on Wednesday that he'd be speaking with Selig about his announcement.
“This is an area that just caught fire. I don’t think anybody expected it to grow at the rate that it has,” Boozman said. “But there is concern; it’s the Wild West. There’s not much regulation.”
Democrats, meanwhile, argued that Selig was asserting authority that didn't exist.
"This is patently false," wrote Sen. Chris Murphy (D-Conn.) in a response to Selig's announcement on social media. "Congress has not given the exclusive power to the CFTC to regulate prediction markets. He just made this up out of thin air because the gambling companies that back Trump wanted him to."
Sen. Elizabeth Warren (D-Mass.) added that "Trump’s CFTC chair is trying to strip states of their authority to regulate gambling within their borders and hamstring their ability to protect Americans from getting ripped off."
Some states are still pushing ahead as usual. In an act of defiance to the administration, the same day as Selig's announcement, gaming regulators in Nevada appeared to thumb their nose at the CFTC by filing a lawsuit seeking to block Kalshi from operating sports betting in the state.
“Its continued operation harms the state and the public every day and poses an existential threat to the state’s gaming industry,” Jessica Whalen, chief deputy solicitor general for the attorney general’s office, wrote in the filing. “Kalshi has continued to dramatically expand its business, rather than attempting to maintain any kind of status quo.”
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