Aug 8, 2026 – The Commodity Futures Trading Commission has issued a warning to regulated prediction market platforms, instructing them to stop displaying American-style moneyline betting odds – a move that underscores the agency's broader push to assert exclusive jurisdiction over the rapidly expanding sector .
The CFTC sent letters to regulated entities reminding them to comply with federal law and avoid "deceptive" practices when listing, advertising, or soliciting event contracts, according to correspondence viewed by Bloomberg
Why the Odds Format Matters
American-style moneyline odds – the familiar plus-and-minus format used in sportsbooks – show how much a bettor would win on a $100 wager. Prediction markets, by contrast, typically display prices in cents that directly correspond to implied probability .
The agency cited research in its letter finding that moneyline-style wagers lead to increased risk-taking behaviour in sports betting . The CFTC argues that presenting event contracts with casino-style odds encourages users to think like gamblers rather than derivatives traders – a distinction that is central to its legal argument for federal oversight .
Jurisdictional Battle Intensifies
The warning lands amid a broader regulatory conflict over which level of government has authority over prediction markets . CFTC Chair Michael Selig has repeatedly argued that the agency holds "exclusive jurisdiction" because event contracts are financial instruments regulated under the Commodity Exchange Act, not wagers subject to state gaming laws .
That position is being vigorously contested. A coalition of 38 state attorneys general has formally opposed federal preemption, while several states have pursued legal action against platforms like Kalshi on allegations of illegal sports gambling . The dispute could ultimately reach the U.S. Supreme Court
Industry Response
Kalshi, a federally registered exchange that commands approximately 89% of U.S. prediction market trading volume, said it would comply with the agency's guidance .
"As a federally regulated exchange, Kalshi follows CFTC guidance and will comply with the letter by its deadline," a spokesperson said in an emailed statement .
Polymarket did not respond to requests for comment
Broader Regulatory Push
The warning is the latest in a series of enforcement actions against the industry, which has experienced extraordinary growth. Combined monthly trading volume on Polymarket and Kalshi climbed by $22 billion to $24 billion between August 2025 and April 2026 .
On July 24, the CFTC issued a separate advisory warning platforms against using broad, template-style self-certifications for event contracts – its second such notice in four months . The agency said many platforms continue to certify contracts "without supplying the terms and conditions of each proposed permutation and a concise explanation and analysis" of compliance with the Commodity Exchange Act
Legislative Dimension
The regulatory conflict has also reached Congress. Senators and tribal gaming regulators have pushed to preserve state and tribal authority over sports betting through amendments to the Clarity Act, as lawmakers weigh federal crypto market legislation . Tribal gaming operations generated $43.9 billion in 2024 revenues, and tribal nations view prediction markets as an existential threat to their compacting authority under the Indian Gaming Regulatory Act .
Without explicit carve-out language, gaming associations argue the legislation could entrench an arrangement where platforms like Kalshi and Polymarket operate outside state gambling law .
CoinaiNews.COM provides independent market analysis and coverage of cryptocurrency, technology, and financial markets. The information presented does not constitute financial advice.
0 Comments