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Welcome to Popular Information, a newsletter dedicated to accountability journalism.
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In an unprecedented move, the Commodity Futures Trading Commission (CFTC) announced that it had filed lawsuits against several states to block their efforts to rein in prediction markets. Arizona, Connecticut, and Illinois have variously sought to prevent Kalshi, Polymarket, Crypto.com, and Robinhood from running what they claim are “unlicensed gambling sites that circumvent state laws.” Several of these companies are business partners of President Trump and his family members.
On March 17, Arizona filed a criminal case against the prediction market platform Kalshi, arguing that it allowed “illegal gambling” and unlawful betting on elections. But the CFTC argues that prediction markets are distinct from traditional gambling.
The CFTC has authority over “swaps” that provide “for any purchase, sale, payment, or delivery… that is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence.” For example, a contract to pay a certain price for corn in the future would serve as an economic hedge against any potential price fluctuations that could affect producers of corn-based products.
Prediction markets, however, allow bets on a range of activities that have no discernible economic consequence. Users commonly place bets on the outcomes of sporting events, which account for 90% of all trading volume on Kalshi. Polymarket allows bets on whether the temperature in London today will be 21 or 20 degrees Celsius. Kalshi has a market for whether Justin Bieber will perform “Baby“ during his April 11 performance at Coachella.
The platforms have also taken bets related to the war in Iran. Bloomberg reported that over $170 million was bet by Polymarket users on a potential ceasefire. Some of the bets have raised suspicions of insider trading. Three Polymarket accounts “earned more than $600,000 by correctly betting” on a ceasefire, shortly after the accounts “made an earlier round of profitable wagers on the U.S. attacking Iran,” the Wall Street Journal reported. The accounts also lost smaller sums on earlier bets on a potential ceasefire.
In a press release, the CFTC argued that “various states have attempted to outlaw, regulate, or otherwise restrain” platforms that “facilitate trading in lawful event contracts.” CFTC Chairman Michael S. Selig said, “The CFTC will continue to safeguard its exclusive regulatory authority over these markets and defend market participants against overzealous state regulators.”
In February, the CFTC filed an amicus brief in federal court defending its right to regulate prediction markets, intervening in a lawsuit on behalf of Crypto.com. But this is the first time that the CFTC itself has sued to block state regulators from policing prediction markets. Ronald Filler, a scholar of CFTC history, told Bloomberg that “he wasn’t aware of any instance when the agency had sued a state in its 50-year history.”
In the lawsuits, the CFTC cited cease-and-desist letters that states sent to platforms such as Kalshi, Polymarket, Crypto.com, and Robinhood that alleged that the platforms were violating state online gambling laws. On April 1, 2025, the Illinois Gaming Board sent letters to Kalshi, Crypto.com, and Robinhood, and accused the companies of “engaging in unlicensed sports wagering.” The letters state that “[i]t is unlawful to knowingly establish, maintain, or operate an Internet site that permits a person to play a game of chance or skill for money or other thing of value via the internet, or that permits a person to make a wager upon the result of any sport, game, contest, political nomination, appointment, or election via the Internet,” without the proper license. The Illinois Gaming Board sent a similar cease-and-desist letter to Polymarket in January.
Kalshi, Polymarket, and Crypto.com all have extensive ties to the Trump family. The Trump administration is now using the power of the CFTC to file lawsuits that will benefit Trump and his family’s business partners. The companies benefiting from the CFTC lawsuit have also donated extensively to Trump’s political operation.
Trump’s business and political ties to prediction markets
Trump Media & Technology Group (TMTG), Trump’s media company and the parent of Truth Social, has an extensive business partnership with Crypto.com. Trump is the largest shareholder of TMTG.
In 2025, TMTG announced it would offer rewards for engagement on Truth Social using Crypto.com’s Cronos tokens (CRO). TMTG and Crypto.com are collaborating to form a new company, Trump Media Group CRO Strategy, Inc., which will hold billions of CRO tokens. In October 2025, TMTG and Crypto.com also announced a partnership to create a prediction market called Truth Predict, which has yet to launch.
Crypto.com has spent millions supporting Trump. Popular Information previously reported that in January, Crypto.com’s parent company, Foris Dax, Inc., donated $5 million to MAGA Inc., the primary Super PAC supporting Trump. A few weeks later, the CFTC filed its amicus brief supporting the company. Since 2025, Crypto.com has donated at least $35 million to MAGA Inc.
Shortly after Trump became president, the Trump administration also dropped a Securities and Exchange Commission (SEC) investigation into Crypto.com that was started under the Biden administration, with no enforcement action.
Many of Trump’s political allies also have connections to the prediction market industry. Trump-supporting billionaire Peter Thiel, for example, has helped