Trump State of the Union Address Mirrors Kalshi Prediction Market Forecasts

Last night’s State of the Union address saw President Donald Trump lean heavily into topics that are front and center of many public debates. Prediction markets were ready, and many exceeded expectations. 

Kalshi gave a 96% chance he would reference "250," and he mentioned the nation’s upcoming 250th anniversary three times, calling the planned "Salute to America 250" the greatest celebration in history. Kalshi also priced "hockey" at 90%, and Trump referenced it four times while hosting the US Men’s Olympic Hockey team. Fresh off gold in Milan, the team received a two-minute ovation, and goalie Connor Hellebuyck was promised the Presidential Medal of Freedom.

Foreign policy matched market forecasts. Kalshi listed "Iran" at 95%, "Venezuela" at 94%, and "China" at 93%. Trump mentioned Iran three times and Venezuela four times, highlighting the capture of Nicolás Maduro. Though Kalshi gave an 87% chance Maduro would be named, Trump referenced him three times while recounting the military raid that brought him into US custody.

Technology and political rivals also featured prominently. "AI / Artificial Intelligence" carried 92% odds and was mentioned twice as Trump promoted a national strategy for dominance. Joe Biden, also at 92%, was referenced four times, largely as a contrast point. The word "alien," priced at 87%, appeared six times, all tied to illegal immigration.

Lower-odds phrases, with less than a 50% chance of being mentioned, such as "Sleepy Joe" and "Trump Derangement Syndrome," were absent. "Drill Baby Drill" appeared once. The address became the longest State of the Union in history.

CFTC Chairman signals legal battle over prediction markets

The speech's alignment with the best prediction markets' forecasts unfolded as federal regulators intensified their defense of those markets in court. Trump’s Commodity Futures Trading Commission (CFTC) Chairman Michael Selig announced earlier this month that he is filing an amicus brief in a case before the US Court of Appeals for the Ninth Circuit concerning sports event contracts.

Before his December confirmation, Selig told lawmakers he would defer to the courts on sports event contracts. However, on Feb. 4, he withdrew a proposed rule from the prior administration that would have prohibited sports and political event contracts. Two months after taking office, he formally intervened in ongoing litigation to argue that prediction markets fall under the CFTC's exclusive jurisdiction, not state gambling laws. 

In a Wall Street Journal opinion piece, 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," said Michael Selig. In a social media video, he added, "To those who seek to challenge our authority in this space, let me be clear: we will see you in court," said Selig.

State regulators in Massachusetts and Nevada are among those challenging the agency's authority in court.