MAGA vs. Broligarch: Prediction Market Showdown

A significant challenge is anticipated for the Trump-aligned right wing, as political alliances, rarely permanent, appear to be dissolving rapidly. The "MAGA-tech bro" partnership, seemingly robust just a year ago, has fractured, leading to questions about which faction the administration would ultimately prioritize.

Last winter, the relationship between these two groups was tenuous, sustained by figures like Elon Musk pushing specific agendas and tech giants settling lawsuits with Donald Trump via substantial payments. However, a decisive shift occurred recently, with the Trump administration seemingly opting for financial interests. The Commodity Futures Trading Commission (CFTC) declared its intent to sue any state, including Republican-led ones, that attempts to regulate prediction markets such as Kalshi.

This past Tuesday, the CFTC formally filed an amicus brief with the Ninth Circuit Court of Appeals, signaling its opposition to numerous lawsuits brought by states against various betting markets, including Kalshi, Polymarket, Coinbase, and Crypto.com (the latter two, primarily cryptocurrency exchanges, have partnered with Kalshi or launched their own prediction market, OG). Unusually, this legal filing was accompanied by a direct threat, conveyed via a video posted on X. In the video, CFTC Chairman Michael Selig asserted the commission's authority over prediction markets, stating, "To those who seek to challenge our authority in this space, let me be clear: we will see you in court."

While a conventional op-ed in the Wall Street Journal, which Selig also penned, would have garnered little attention, a video threat posted on X in 2026 is inherently designed to ignite a political controversy. Republican Governor Spencer Cox of Utah eagerly fueled this fire, responding on X: "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. These prediction markets you are breathlessly defending are gambling—pure and simple. They are destroying the lives of families and countless Americans, especially young men. They have no place in Utah." Governor Cox vowed that Utah would persist with its litigation and was prepared to defeat the federal government in court.

This is not the first instance of Utah and Governor Cox resisting perceived federal overreach concerning emerging technologies. Last year, they publicly opposed an executive order that would have empowered the Justice Department to sue states enacting AI regulatory laws. The issue of prediction markets resonates particularly strongly in Utah, where nearly half the population is Mormon, and The Church of Jesus Christ of Latter-day Saints officially opposes all government-sanctioned gambling, including state lotteries. Cox’s resolute stance serves as a political "weathervane," indicating that if a staunchly Republican state is challenging the Trump administration on this new front, other conservative states might soon follow suit, potentially against other "broligarch" technologies.

Separately, a curious timing coincidence has emerged around Anthropic CEO Dario Amodei’s recent visit to Washington, occurring precisely as the Pentagon began reevaluating its engagement with the AI company. Over the preceding two weeks, Amodei had been highly active, publishing a 38-page letter to Congress warning of AI's existential risks, conducting an interview with Axios's Mike Allen (which also sponsored their newsletter), and meeting with Senators Elizabeth Warren (D-MA) and Jim Banks (R-IN) on Capitol Hill to advocate for their bill banning the sale of advanced AI chips to China.

However, Amodei's Washington campaign had barely concluded when Axios reported over the weekend that the Pentagon was not merely frustrated with Anthropic's reluctance to permit unrestricted use of its AI model, Claude, but was actively planning to penalize the company. This punishment would involve designating Anthropic a "supply-chain risk," which would necessitate any company wishing to collaborate with the military to sever ties with Anthropic. A Pentagon official articulated the sentiment, stating, "It will be an enormous pain in the ass to disentangle, and we are going to make sure they pay a price for forcing our hand like this."

From a purely product-centric view, the Pentagon's decision appears counterintuitive, especially given that many consider Claude to be a superior enterprise AI product compared to its competitors, such as Gemini, ChatGPT, and Grok. Yet, when observed through the historical lens of the Trump administration's interactions with companies perceived to hold ideological opposition to its agenda, this treatment of Anthropic aligns with established patterns. For instance, years ago, Trump threatened to revoke Amazon's preferential deal with the U.S. Postal Service in retaliation for Jeff Bezos's ownership of The Washington Post, which was then a vocal critic.

This raises a crucial question: what exactly precipitated this ideological rift, and to what extent was national security truly the driving factor? Recent months have seen a peculiar surge of online commentary from right-wing influencers attempting to label Anthropic, among all AI companies, as "too woke." These accusations often involve speculative concerns about the AI's potential to influence children towards gender transition or promote Diversity, Equity, and Inclusion (DEI) initiatives—the kind of "lib-coded" anxieties a MAGA personality might conjure. However, concrete evidence supporting these claims has been scarce, largely relying on interpretations of employee opinions that could be seen as "lib-coded" if not fully contextualized.

Meanwhile, the White House is preparing to host a third meeting this week between the crypto and banking industries. The discussions will continue to address the complex issue of which financial entities are entitled to accrue interest from yield-bearing stablecoin accounts, or indeed, if such accounts should bear interest at all. The involved parties face a deadline of March 1st to submit draft legislative language to the Senate.

On a lighter note, can we collectively agree that HHS Secretary Robert F. Kennedy appears to be "framemogging" Kid Rock in that particular video?

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