Trump Backs Federal Regulators in Prediction Market Dispute

The US government has been at odds with states over regulation of prediction markets, which allow users to wager on various outcomes. President Donald Trump has now weighed in, backing federal regulators and calling state officials 'scum' for trying to apply their own laws.

Prediction markets are a growing sector, projected to reach $1 trillion in market volume by 2030. They allow users to bet on everything from cryptocurrency prices to sports outcomes. Federal regulators treat them as derivatives under the Commodity Futures Trading Commission (CFTC), while states seek to apply gambling laws.

The CFTC is currently working on a framework for regulating prediction markets, which would bring exchanges onshore and provide clear rules for investors. However, lawmakers have raised concerns about issues such as insider trading and offshore platforms reaching US users.