Trump softens on prediction markets amid global competition

President Trump softened his criticism of prediction markets over the weekend, saying he was unsure where he stood, that “very smart” people support the industry and warning the United States could be left behind as other countries move to adopt the platforms.

Earlier in the week the president had criticized prediction markets, calling them a factor in turning the world “somewhat of a casino.” Those remarks followed the arrest of a U.S. soldier who federal authorities accuse of using classified intelligence to win more than $400,000 on a wager about the timing of a military operation on Polymarket.

When pressed by a reporter at the White House on Saturday, Trump said, “Well, I don’t know,” and noted some people he considers knowledgeable favor the markets. He declined to direct his administration to change course and added that “a lot of other countries are doing it,” warning the U.S. could be “left out in the cold” if regulators refuse to allow similar platforms.

Prediction markets let users bet on outcomes ranging from financial and crypto events to sports, entertainment and elections. The industry has expanded rapidly, with weekly trading volumes exceeding $7 billion and top platforms achieving multibillion-dollar valuations. That expansion has prompted a wave of lawsuits and regulatory scrutiny in multiple states.

The president’s family and business ties to the sector have attracted attention. Donald Trump Jr. serves as an adviser to two major U.S. platforms and is an investor in at least one. The president’s media company has also launched a “Trump Predict” feature on his social platform.

At the federal level, prediction-market contracts are treated as commodities and fall under the Commodity Futures Trading Commission’s jurisdiction. The CFTC, led by Mike Selig, a presidential appointee, has mounted a legal defense of several major platforms facing state lawsuits. States contend some wagers-particularly those tied to sports, politics or entertainment-violate state gambling laws. Platforms argue their products are event contracts governed exclusively by federal law.

Lawmakers on Capitol Hill have raised questions about the CFTC’s position, pointing to risks including insider trading and the spread of unregulated gambling. The arrest connected to the Polymarket bet has intensified scrutiny and prompted further regulatory and legal review.

Trump’s weekend comments offered uncertainty rather than a policy change. He did not announce any directive, and legal disputes and regulatory reviews related to prediction markets remain active.