NEW YORK (AP) — The Trump administration is throwing its support behind the prediction market operators Kalshi and Polymarket in a critical legal battle between the growing prediction market industry and states that wish to ban these platforms.
The move by Michael Selig, the recently appointed chairman of the Commodity Futures Trading Commission, could have enormous implications for how sports betting is regulated in the country and, if Kalshi and Polymarket were to prevail, could erode the ability for states to effectively regulate gambling.
Any friendly decision the CFTC makes on this industry could end up financially benefiting the president's family as well. President Trump’s son, Donald Trump Jr., has invested in Polymarket through his venture capital firm and is a strategic advisor for Kalshi.
The CFTC currently regulates prediction markets, and that federal oversight allows Kalshi and others to operate in all 50 states, even those where gambling is illegal. Several states have sued Polymarket and Kalshi, alleging that the companies effectively operate casino or gambling operations in violation of state gambling laws, and have ordered them to shut down or stop operating in their states.
In an opinion piece in the The Wall Street Journal, Selig wrote, “The CFTC will no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction over these markets by seeking to establish statewide prohibitions on these exciting products.”
Polymarket and Kalshi and other prediction markets allow participants to buy and sell contracts tied to the probable outcome of an event. Customers can wager on everything from whether it will rain in Los Angeles tomorrow to who will in the NBA championship to whether the U.S. and Iran will go to war. The contracts are typically priced between one cent and 99 cents, which roughly translates into what percentage of those customers believe that event will happen.
While customers can bet on anything, roughly 90% of Kalshi’s trading volume goes toward wagers on sports, while roughly half of Polymarket’s trading is tied to sports. Kalshi said it saw more than $1 billion in volume trade on the Superbowl.
The biggest of the lawsuits comes from Nevada, where the Nevada Gaming Control Board sued or issued enforcement actions against Kalshi and Polymarket, saying they are operating unlicensed sports betting operations in the state. A federal judge agreed with the NGCB and issued a temporary restraining order against Kalshi from operating in the state.
In response, Kalshi has appealed the case to the U.S. Court of Appeals for the 9th Circuit, which is why the CFTC is weighing in through what is known as a “friend of the court” briefing.
As the regulator of commodities, futures and derivatives, the CFTC has historically overseen markets like oil futures, agricultural products, gold, and other financial products. At roughly 700 employees, the CFTC is much smaller than the Securities and Exchange Commission, with roughly 5,000 employees. But as the CFTC has become the favored regulator of cryptocurrency companies and prediction markets proponents, it has taken on a much larger role in financial markets in the last five years.
By stepping into the lawsuit, the Trump administration is taking an unusually broad definition of commodities and futures. Selig has shifted his position from what he told Senators at his confirmation hearing, where he said that it would be best for the CFTC to defer to the courts on the core legal issue facing Kalshi and Polymarket.
Last week Selig announced the the regulator would create an “Innovation Advisory Committee” to help the CFTC draft regulations on issues such as cryptocurrencies and prediction markets. The 35-member panel includes the CEOs of Polymarket, Kalshi, Coinbase, Robinhood, FanDuel and DraftKings. While there's some representation from traditional finance, the panel has no representation from consumer advocates or public interest groups.
Selig now says that prediction markets effectively do the same thing as other futures contracts, where customers can hedge against bad weather or changes in energy prices, and they are not betting against the house, which is what happens with sports book companies. The states that have taken legal action against Kalshi and Polymarket argue that while these companies do offer customers the ability to bet on future events, the vast majority of their business is sports betting. Further, most prediction markets allow customers 18 years or older to use their platforms, while state gambling is limited to those 21 years or older.
Selig now says states cannot preempt federal regulators.
“To those who seek to challenge our authority in this space, let me be clear, we will see you in court,” Selig said in a video statement.
Some members of the GOP pushed back on Selig's announcement, including the Governor of Utah, which has some of the strictest gambling laws in the country.
“Mike, I appreciate you attempting this with a straight face, but I don’t remember the CFTC having authority over the “derivative market” of LeBron James rebounds,” said Gov. Spencer Cox, in a statement on Twitter. “These prediction markets you are breathlessly defending are gambling — pure and simple.”
FILE - The Polymarket prediction market website is displayed on a computer screen, Jan. 11, 2026, in New York. (AP Photo/Wyatte Grantham-Philips, File)
AUSTIN, Texas (AP) — Late-night host Stephen Colbert said his interview with Democratic Texas Senate candidate James Talarico was pulled from Monday night's broadcast over network fears it would violate regulatory guidance from the Trump administration on giving equal time to political candidates.
The issue came just hours before early voting opened Tuesday in Texas' primary elections, which feature hotly-contested Senate nomination races in both parties.
“He was supposed to be here, but we were told in no uncertain terms by our network’s lawyers, who called us directly, that we could not have him on the broadcast,” Colbert said on his program, ”The Late Show with Stephen Colbert."
“Then I was told, in some uncertain terms, that not only could I not have him on, I could not mention me not having him on. And because my network clearly doesn’t want us to talk about this, let’s talk about this.”
CBS disputed Colbert's account, denying that his show was told it couldn't interview Talarico. Instead, CBS said Tuesday, “The show was provided legal guidance that the broadcast could trigger the FCC equal-time rule.”
Talarico is in a spirited contest for the Democratic nomination as media institutions are navigating around changing broadcast guidance, issued under the Trump administration, governing how they interview political candidates. His main opponent is U.S. Rep. Jasmine Crockett, and both have built national profiles through viral social media clips.
On the Republican side, four-term incumbent Sen. John Cornyn is facing the political fight of his career against Texas Attorney General Ken Paxton and U.S. Rep. Wesley Hunt. Paxton stepped up his campaign with a Monday night rally in Tyler in east Texas.
Talarico posted a nearly minute-long clip of his interview with Colbert on X, calling it “the interview Donald Trump didn't want you to see.” He planned to have a Tuesday evening rally in Austin.
“I think Donald Trump is worried we're about to flip Texas,” Talarico said in a statement. “This is the most dangerous kind of cancel culture, the kind that comes from the top.”
Broadcast networks have been required to give equal time to political candidates, but that rule hasn't traditionally been applied to talk shows. In January, the Federal Communications Commission issued new guidance warning late-night and daytime hosts that they need to give political candidates equal time, with FCC Chairman Brendan Carr questioning the talk show exemption and positing that hosts were “motivated by partisan purposes.”
“The FCC has not been presented with any evidence that the interview portion of any late night or daytime television talk show program on air presently would qualify for the bona fide news exemption,” according to the public notice.
In his comments, Colbert noted that the equal time provision applies to broadcast but not streaming platforms. Subsequently, his nearly 15-minute interview with Talarico was posted to the YouTube page for Colbert's show, with the host noting specifically that the segment was only appearing online and not on broadcast.
The FCC did not immediately respond Tuesday to a message seeking comment.
But Carr, appointed by Trump to lead the agency last year, has often criticized network talk shows, suggesting last year that probing ABC’s “The View” — whose hosts have frequently been critical of Trump — over the exemption might be “worthwhile.”
Colbert’s days in his host chair are limited, following CBS’ announcement last year that it was canceling his show this May for financial reasons, shuttering a decades-old TV institution in a changing media landscape.
But the timing of that announcement — three days after Colbert criticized the settlement between Trump and Paramount Global, parent company of CBS, over a “60 Minutes” story — led two U.S. senators to publicly question the motives behind the move, which served to remove from air one of Trump’s most prominent and persistent late-night critics.
Meanwhile, Talarico and Crockett are hoping to avoid a May 26 runoff by capturing at least 50% of the Democratic vote in the March 3 primary. Paxton, too, is trying to avoid a runoff, and until Friday, the only ad his relatively low-key campaign ran had attacked Hunt.
Hunt is trying to appeal to voters seeking an alternative to Cornyn but uneasy about Paxton. The Texas attorney general beat a 2023 impeachment trial on corruption charges and reached a deal to end a long-running securities fraud case but now faces a contentious divorce over allegations of adultery.
Hunt released a new ad Tuesday, with photos of him with Trump, hitting Cornyn over his long political year and declaring, “This is our moment to end the status quo.”
But Paxton's campaign has been airing its own ad featuring video clips of him with Trump since Friday. The president had not endorsed any candidate as of Monday. Paxton on Monday night portrayed Cornyn as a creature of the Washington establishment, adding, "Well, I’m not their person and I’m never going to be their person.”
Early voting began with Paxton looking like the GOP's front-runner, even though Cornyn’s campaign and allied super PACs had spent more than $54 million on television advertising since last year, according to the ad-tracing service AdImpact. Paxton believes he's even better known than Cornyn.
Republican Senate leaders in Washington say Paxton as the GOP nominee would require hundreds of millions of dollars more to defend in a general election than Cornyn would — and that the party shouldn't have to spend in a state Trump carried by over 13 percentage points.
Cornyn hit on those concerns in a Tuesday rally in Austin.
“We’ll pay the price of having an albatross like our corrupt attorney general around their neck,” he said. "It will take a toll on everybody on the ballot.”
Kinnard reported from Columbia, South Carolina and, Hanna, from Topeka, Kansas. Associated Press reporter David Bauder contributed to this report from New York, and Associated Press reporter Tom Beaumont, from Tyler, Texas.
Meg Kinnard can be reached at http://x.com/MegKinnardAP
FILE - This photo combination shows Stephen Colbert, left, in Los Angeles, Sept. 12, 2022 and Texas Rep. James Talarico, Aug. 16, 2025, in Chicago. (AP Photo/Talia Sprague, Jae C. Hong, file)
