CFTC Warns Prediction Markets to Stop Using American-Style Betting Odds Displays

Aug 7, 2026

The Commodity Futures Trading Commission (CFTC) has ordered regulated prediction markets to stop displaying contract prices as American-style moneyline betting odds. The directive aims to draw a clearer line between financial derivatives and sports gambling. The move comes amid intense jurisdictional battles, with states like Kentucky and Minnesota challenging the CFTC's authority, and gaming groups testifying that these platforms have cost them $1.2 billion in lost tax revenue.

CFTC American odds ban

▪A spokesperson for Kalshi stated that the platform follows Commodity Futures Trading Commission guidance and will comply with the warning letter by its deadline.
▪The Commodity Futures Trading Commission's warning letter instructed platforms to comply with the Commodity Exchange Act and avoid deceptive practices in listing, advertising, or soliciting.
▪The Commodity Futures Trading Commission cited a study in its warning letter indicating that American-style wagers led to increased risk-taking in sports betting.
▪The Commodity Futures Trading Commission issued a warning to regulated prediction markets to stop using American-style moneyline betting odds.

Prediction market regulatory jurisdiction

▪A federal judge in Michigan ruled that sports prediction markets are not regulated by the Commodity Futures Trading Commission.
▪Kentucky filed a lawsuit against Kalshi and Polymarket in June 2026, alleging that the platforms were operating illegal sports betting operations.
▪Minnesota banned prediction markets, prompting the Commodity Futures Trading Commission and the Department of Justice to sue the state in May 2026 over federal authority conflicts.
▪Commodity Futures Trading Commission Chair Michael Selig maintains that the agency holds exclusive jurisdiction over prediction markets, leading to lawsuits against several states.

Gaming industry opposition

▪The Indian Gaming Association and the American Gaming Association testified that prediction market sports contracts have cost states and tribes over $1.2 billion in lost tax revenue.
▪American Gaming Association Senior Vice President Chris Cylke testified that sports contracts on Kalshi and Polymarket bypass age verification, geofencing, and responsible gambling tools.
▪Indian Gaming Association Chairman David Bean urged Congress to advance H.R. 7840, the Event Contract Enforcement Act, to prevent sports gambling through prediction markets.

Derivatives versus sports betting

▪Benjamin Schiffrin of Better Markets stated that the Commodity Futures Trading Commission's directive is an attempt to disguise sports event contracts so they do not resemble gambling.
▪Prediction market platforms price binary contracts in cents of a dollar representing implied probability, which are then converted by some platforms into traditional moneyline odds.

Event contract listing requirements

▪Nine Democratic senators sent a letter to Commodity Futures Trading Commission Chair Michael Selig urging a ban on prediction market contracts tied to wildfires.
▪The Commodity Futures Trading Commission released an Advance Notice of Proposed Rulemaking alongside Staff Advisory No. 26-08, with public comments due by April 30, 2026.
▪The Commodity Futures Trading Commission's Division of Market Oversight published Staff Advisory No. 26-08, outlining transparency and manipulation prevention requirements for event contracts.

Perspective of Gaming Industry Advocates

▪The Indian Gaming Association and the American Gaming Association testified that prediction market sports contracts have cost states and tribes over $1.2 billion in lost tax revenue.
▪American Gaming Association Senior Vice President Chris Cylke testified that sports contracts on Kalshi and Polymarket bypass age verification, geofencing, and responsible gambling tools.