Could Trump’s Support for Prediction Markets Result in Their Downfall?

(AsiaGameHub) –   President Donald Trump has voiced strong support for the prediction markets industry, branding Democrats who oppose its expansion as ‘SCUM’. Yet with Democrats favored to win the next election, the sector could face major upheaval within two years.

Trump issued his most explicit endorsement of prediction markets to date in a post on his social media platform, Truth Social. He specifically criticized Democratic leaders who have taken steps to curb the growth of these markets, naming New York Attorney General Letitia James, Minnesota Governor Tim Walz, and Illinois Governor JB Pritzker.

James has filed lawsuits against Coinbase and Gemini, while both Walz and Pritzker enacted legislation limiting the operation of prediction markets.

At the same time, Trump voiced support for the CFTC and its chair, Michael Selig, whom he appointed. The CFTC has taken an assertive stance against state-level regulators, initiating legal action against Illinois and Minnesota, as well as Arizona and Connecticut—states also governed by Democrats.

Trump Reverses Skepticism with Forceful Support

Trump had recently signaled waning enthusiasm for prediction markets. Following the arrest of a U.S. soldier for betting on the capture of Venezuelan leader Nicolás Maduro, he expressed disapproval of the industry’s widespread influence.

“The whole world, unfortunately, has become somewhat of a casino,” Trump remarked. “You look at what’s happening all over the world and in Europe, and everywhere they’re engaging in these betting activities. I was never much in favor of it. I don’t like it conceptually, but it is what it is now.”

Trump Media, which has a partnership with Crypto.com, previously paused plans to launch a Truth Predict platform. Those plans may be revived now that Trump has reaffirmed his backing for the industry.

He quickly moderated his critical tone. Just two days after calling the concept unappealing, he stated he would not want the U.S. to fall behind other nations.

His Truth Social post emphasized his desire for the U.S. to lead in this emerging financial market. However, many other countries remain opposed to prediction markets. Spain and Indonesia recently banned such platforms, classifying them as unlicensed gambling.

Brazil had already blocked Kalshi, while Polymarket is now banned in over 33 countries. Unlike the U.S., where regulation varies by state, most other nations adopt a uniform approach: treating prediction markets as gambling and subjecting them to strict oversight.

Partisan Divide May Deepen

Several bipartisan legislative efforts in Congress aim to restrict prediction markets. In Utah, Republican Senator John Curtis introduced the “Prediction Markets Are Gambling Act”.

Meanwhile, Rep. Adrian Smith, a Republican from Nebraska, co-sponsored the PREDICT Act, which would impose additional limits on who can participate in these markets.

The Senate has already passed a ban on members placing wagers, but Trump is unlikely to endorse broader congressional efforts to regulate the industry.

His Truth Social post drew a sharp response from Democrats, including JB Pritzker, who posted on X: “The most corrupt President in our nation’s history wants to ensure states like ours cannot regulate prediction markets so his family and administration can keep profiting.”

If the issue becomes a clear partisan fault line, it may benefit prediction markets in the near term but harm them over the long run.

The Next Election Could Reshape the Landscape

Kalshi currently assigns a 61% probability that Democrats will win the 2028 presidential election.

Although it’s still early, there are strong indications that Republicans may struggle to replicate their 2024 success without Trump.

The previous election prompted Donald Trump Jr. to join Kalshi as a strategic advisor. He posted on X that Kalshi’s accurate forecast of Trump’s victory convinced him to support their mission.

On Election night at Mar-a-Lago, while biased outlets called the race a coin toss, my family and close friends used the prediction market @Kalshi to know we won hours ahead of the fake news media.

I immediately knew I had to contribute to their mission. Today, I am proud to…

— Donald Trump Jr. (@DonaldJTrumpJr) January 13, 2025

Since then, he has also become an advisor to Polymarket and invested in the company through his venture firm, 1789 Capital.

After Trump’s election victory, he initially nominated Kalshi board member Brian Quintenz to lead the CFTC. Amid criticism from the Winklevoss twins, who operate the prediction market platform Gemini, he withdrew the nomination and instead appointed Selig.

During the Trump administration, the CFTC facilitated the advancement of prediction markets by resisting internal efforts to impose strict regulations, according to a recent New York Times report. Biden-appointed officials were removed, and the agency actively defended its licensees.

This suggests that if Democrats win the 2028 election, as forecasted, the CFTC could undergo another major restructuring. Trump claimed his administration is “setting ‘rules of the road’ that are the Gold Standard for the States,” but those standards could be overturned under a Democratic president.

Gavin Newsom is currently seen as the leading Democratic contender for the 2028 race. He has received millions in donations from tribal groups, which strongly oppose prediction markets—particularly those involving sports betting, which tribes view as a direct threat.

If elected president, Newsom would likely adopt a hardline stance against such wagering platforms.

As a result, Trump’s endorsement of prediction markets may ultimately prove to be a double-edged sword.