Trump's CFTC sues states to back Kalshi and Polymarket, Trump Jr. involved
The Commodity Futures Trading Commission under the Trump administration is suing states in support of prediction market platforms Kalshi and Polymarket, according to reporting from Sludge. Donald Trump Jr. is backing the effort. Both companies have been hiring revolving-door lobbyists from both Democratic and Republican sides. The agency is also preparing a crackdown on promotional incentives offered by prediction-market platforms including Kalshi, Polymarket, and Novig, signaling tighter enforcement around marketing tactics used to attract retail traders to event contracts.
The CFTC is now playing both offense and defense for prediction markets. Suing states on behalf of Kalshi and Polymarket while separately threateningthose same platforms with enforcement over promotional incentives creates a split posture that leaves operators guessing which side of the agency will blink first. Kalshi and Polymarket must lawyer up for the state preemption fight while scrubbing marketing offers that the CFTC itself says could trigger action.
Resource allocation bends around two masters pulling in different directions. Lobbying hires from both parties, noted by the sources, suggest the platforms see political insurance as cheaper than legal certainty. The first design change order or state settlement will reveal which pressure wins. Traders face interface changes and possible position freezes without clear sequencing. No platform can price compliance risk when its federal regulator is simultaneously suing for it and warning against it.