Trump administration moves to shield prediction markets from state regulation
The Trump administration is intervening to block state-level regulation of prediction markets. The move comes as platforms including Polymarket and Kalshi face expanding legal challenges from state authorities. Bonus.com reports the administration's action. Several platforms and brokers are mentioned in the space: Crypto.com, Interactive Brokers, NinjaTrader, OG.com, ProphetX, and DraftKings.
Federal intervention could freeze state enforcement actions that have pinned Kalshi and Polymarket in courtrooms across multiple states. Novig has already flipped to an offensive strategy, suing five states for declaratory judgment before they can act. A federal preemption shield from the White House would validate that playbook and let every CFTC-registered platform cite federal supremacy at the first state threat. States would lose their primary leverage: the threat of immediate geofencing or shutdown orders.
The timing matters because Novig's Wisconsin case and its broader five-state sweep are active now. A clear federal stance removes the ambiguity that lets state attorneys general file first and litigate for months. Traders on every platform gain contract validity that no longer fractures by geography. Rivals must then pivot from reactive defense to a unified federal strategy, or risk being left with weaker state-by-state settlements.
The administration's intervention arrives the same week the CFTC publicly claimed it was already shielding platforms from state attorneys general, with state-court orders in Washington and Connecticut still in force against Kalshi.