The prediction-market industry has a lot of reasons to be optimistic right now. It’s growing extremely quickly, multiplying many times in size since last year by drawing in new users. Kalshi just raised another billion, and its valuation is skyrocketing. Prediction-market data is incorporated into tools like Google Finance and frequently included in media reporting, and major financial institutions want into the game, too. And despite plenty of negative press and social-media attention around insider-trading allegations, companies like Kalshi are operating in an incredibly friendly federal regulatory environment compared to a couple of years ago. So why, this week, are prediction-market companies on the defensive?

Sure, it’s true that president and former casino owner Donald Trump said, in response to questions about prediction-market trades around the war in Iran, that “the whole world, unfortunately, has become somewhat of a casino,” concluding that “it is what it is.” It’s also true that his son Donald Jr. has advised both Kalshi and Polymarket and that his social-media platform, Truth Social, announced late last year that users will soon be able to use the platform to “trade prediction contracts related to major events and milestones, such as political elections, interest and inflation rate changes, commodity prices on gold and crude oil, events across all major sports leagues, and more using the new product technology called ‘Truth Predict.’”

The Trump administration’s orientation toward prediction markets is most evident in the actions of its Commodity Futures Trading Commission, which is led by sympathetic libertarian Michael Selig, who has promised to “achieve the golden age of American financial markets” and characterized users of platforms like Kalshi and Polymarket — who, it should be noted, trade on sports outcomes in far higher volumes than anything else — as “market participants [who] seek to hedge portfolio risks and test their abilities to forecast truth.” Selig’s CFTC is currently taking multiple states to court over legislation attempting to regulate or ban prediction markets — often as a form of gambling competitive with licensed casinos — on the basis that his agency should be the “exclusive regulator” of companies that technically allow people to trade and participate in new markets, not make wagers (a position with which a large majority of states seem to have at least some disagreement).

It’s a good time to be a prediction-market company, in other words. Or to found or expand into one, which is happening at a far larger scale than even heavy prediction-market users probably realize:

Welcome to the party, pal! https://t.co/DS0TuovXAx pic.twitter.com/cA8pPOj5Ej— Mick Bransfield (@MickBransfield) May 5, 2026

Welcome to the party, pal! https://t.co/DS0TuovXAx pic.twitter.com/cA8pPOj5Ej

They’ve got backing from investors, obvious growth, loyal users, and the full-throated support of national regulators — they’ve won the argument with the people who at this point matter to them the most, at least for now. But they haven’t yet won the argument with everyone else,........

© Daily Intelligencer