The Trump administration is accusing three countries of trying to control the prediction markets

The Trump administration on Thursday filed charges against the three it says, arguing that the controversial market industry should be regulated by the government alone, not by gambling commissions.

Three legal actions against Illinois, Connecticut and Arizona are advanced by Trump officials in an attempt to break state laws and regulations for a fast-growing industry embroiled in thorny questions about insider trading and profiting from war and suffering.

For months, Trump officials have expressed support for the predictive market industry, but experts say the federal suits represent a dramatic increase.

“This is not just telling the court what their opinion is, but it’s trying to put a hand on the scale for the predicted markets,” said Todd Phillips, a Georgia State University professor who focuses on financial regulation.

The wave of lawsuits has followed the growth of criminal prediction market sites Kalshi and Polymarket, which insist they are not gambling operations, but exchanges that allow people to bet on the outcome of future events.

That situation has insulted the countries, including the three indicted Thursday, which say Kalshi and Polymarket are nothing more than unregistered gambling sites that flout state laws and don’t pay the gaming tax paid by competing services like DraftsKings, FanDuel and other online sportsbooks. Arizona filed criminal charges against Kalshi last month, saying it violated state sports laws.

The Trump administration sees things differently. It says the markets are an invisible financial product known as a “swap,” a derivative contract where people can bet on future events. Three lawsuits filed Thursday on behalf of the Commodity Futures Trading Commission are asking federal courts to declare that states have no business regulating these types of financial markets.

“The CFTC will continue to defend its authority to regulate these markets and protect market participants against overzealous government regulators,” said CFTC Chairman Michael Selig.

Kalshi declined to comment. In a statement, a Polymarket spokeswoman said futures markets should be regulated by the federal government, adding “we applaud the CFTC for taking action to protect these important markets.”

Georgia State University’s Phillips said the cases add to the backlog of pending cases, some of which could eventually reach the Supreme Court.

“And the main question will be whether the prediction markets fit the definition of finance, or gambling?” he said. “I think it’s very difficult to say that it’s financial, but the courts can go down a different path.”

People bet billions of dollars a week on Kalshi and Polymarket. While the majority of betting applications are related to sports, they allow people to bet on what President Trump will say, the outcome of the election and political developments, such as The White House official will then be removed by the president.

Donald Trump Jr., the president’s son, has been a long-time proponent of early stage markets and is a consultant to Kalshi and Polymarket.

Polymarket, which operates the only sports exchange in the US and a larger one overseas in Panama, has had markets on military attacks in Iran, the extent of the famine in Gaza and whether there will be a nuclear explosion.

After dealers made hundreds of thousands of dollars in military weapons deals in Venezuela and Iran, lawmakers in Washington are crying foul, pushing for legislation to ensure that US officials and soldiers cannot profit from government intelligence.

However, Kalshi and Polymarket continue to close partnerships with news agencies and financial services firms, as millions of users around the world flock to lightly regulated sites.

Amanda Fischer, a former Securities and Exchange Commission chief of staff who is now policy director at the Better Markets advocacy group, said the prediction market sites Kalshi and Polymarket are expanding by using the playbook used by the cryptocurrency industry.

“Which causes their industrial disruption to be technological disruption when I would describe it as legal disruption,” Fischer said. He said: “They are willing to take legal risks and break the rules, and basically take a ‘catch me if you can’ approach. “And they want to create enough conditions, enough customers, enough profits and enough political power that the law is willing to match their business model.”