The era of "everything is bettable" has arrived! Predicting the escalation of market regulation, Trump joins the CFTC.

President Trump supports the Commodity Futures Trading Commission (CFTC) as the sole regulatory agency for prediction markets, taking the side of the CFTC in its escalating legal battles with various states over this multi-billion dollar emerging industry. As the federal government pushes to include prediction markets in the regulatory framework of "derivative/event contracts" at the federal level, rather than allowing individual states to regulate them under gambling laws, it will undoubtedly accelerate the financialization trend of the "everything is bettable" prediction market. On Tuesday, President Trump stated in a social media post, "Maintaining the exclusive authority of the CFTC over prediction markets is crucial, and they will flourish in the future under my leadership. We are establishing 'rule of the road' that will become the gold standard for state governments." Over the past year and a half, with the Trump administration accepting this emerging industry, the trading volume of prediction markets has surged. This industry allows customers to bet on almost anything. However, some state-level agencies have opposed leading prediction market companies like Kalshi and Crypto.com, claiming that these companies fall under their jurisdiction. This has sparked a series of legal battles surrounding the industry, with states like Nevada, New Jersey, and Connecticut taking actions to crack down on these prediction platforms, claiming they are skirting state laws. The CFTC has supported the companies involved in some of these state court challenges. The federal regulatory agency has also filed lawsuits against some states attempting to regulate these platforms; the CFTC currently views these platforms as derivatives exchanges. According to reports, the CFTC has sued multiple states, asserting its exclusive regulatory authority over registering prediction markets; a criminal case against Kalshi in Arizona was also halted by a federal judge at the request of the CFTC. The CFTC stated in a statement in April, "The CFTC has taken this unprecedented action to protect the exclusive jurisdiction granted to this regulatory agency by Congress." It is reported that members of the Trump family have also entered the prediction market field. Trump's son, Donald Trump Jr., is the chief consultant of Kalshi and Polymarket, and the Trump Media & Technology Group Corp has announced its own prediction market trading platform. As for whether prediction markets will become a presence comparable to mainstream financial markets, they do have the opportunity to become an important offshoot of mainstream financial markets, but in the short term, they are not yet equivalent alternatives. The depth, liquidity, pricing efficiency, and standardization of contracts in this market are still significantly different from core markets such as stocks, interest rates, foreign exchange, and commodities. The more realistic prospect is that it will first become a new asset category between trading, gambling, risk hedging, and information aggregation, especially in the expansion of sports, politics, macro events, and some corporate events; but to truly "rival" mainstream financial markets, it still needs to overcome three thresholds of regulatory legitimacy, liquidity quality, and market credibility. The era of "everything is bettable" predictions Prediction markets like Kalshi and Polymarket have become global hits since the end of the 2024 US presidential election. Nearly everyone was fervently betting real money on the Polymarket platform on who would win the US presidential election, indicating the trend of "everything is bettable" sweeping the financial market. Bets related to an Iran war have pushed Polymarket geopolitical contracts to record highs, highlighting the trend that everything can be gambled on, but also quickly pushing the boundaries of regulation and ethics. To a large extent, prediction markets have become increasingly popular among retail investors in the past year because they provide a new way to bet on major events (such as whether the US government will shut down again), sports events, and cryptocurrency prices. These are still the biggest business categories on Polymarket and Kalshi, but these two companies have long promoted themselves as financial venues for trading on political and global events. Prediction markets have now expanded to cover a wide range of topics, including politics, sports, economic data, weather, and geopolitical events. With important channels such as Robinhood introducing related contract trading to a large investor base, and traditional giants like ICE and CME entering the market through investments or new platforms, the credibility and user reach of the entire prediction industry have been significantly boosted. Prediction markets are rapidly transitioning from niche products to mainstream financial interfaces. Prediction markets have entered sports in the form of "event contracts," attracting trading volume in some states even without legal sports betting, thus becoming an important source of incremental revenue for platforms like Kalshi, while also sparking compliance controversies and attention at the state level. More significantly, some Wall Street investment institutions and professional trading funds are starting to use them for betting/hedging probabilities of macro and company events (such as Federal Reserve monetary policy, the success or failure of large mergers and acquisitions) because prediction market contract structures are binary and express more "purely." An analysis team from the well-known Wall Street financial institution Citizens Financial Group Inc. stated in a research report that companies like Polymarket, prediction market companies, could see their overall revenue grow fivefold by 2030 to over $10 billion, surpassing the current market size.