Former Trump Official: Prediction Markets Are Gambling, Should Be Regulated by States

Prediction markets are currently embroiled in insider trading allegations and legal battles at the state level. Former Trump White House Chief of Staff Mick Mulvaney has weighed in on the controversy, advocating for state-level regulation of these markets. Mulvaney believes that prediction markets should be governed by state gaming regulators rather than by the Commodity Futures Trading Commission (CFTC).

Mulvaney leads a coalition called Gambling Is Not Investing to remove the CFTC from regulating prediction markets. He cited recent insider trading allegations regarding the removal of the Iranian regime and contracts surrounding the capture and arrest of Venezuelan leader Nicolás Maduro as evidence that the CFTC is not equipped to oversee these platforms.

Several states have already taken legal action against prediction markets. Nevada recently won a restraining order against Polymarket from operating in the state. In January, a state judge in Massachusetts granted a preliminary injunction against Kalshi, barring it from offering sports contracts in the state. Additionally, regulators in Tennessee sent cease-and-desist letters to three prediction market companies. Federal lawmakers have also called for reform, questioning whether the contracts are end-runs around state sports betting laws.