Catenaa, Thursday, August 13, 2026-The US Commodity Futures Trading Commission has warned regulated prediction market platforms against using American-style betting odds, adding another layer to the growing dispute over whether sports event contracts belong under federal derivatives regulation or state gambling laws.
The CFTC sent letters to regulated entities instructing them to comply with federal rules and avoid potentially deceptive practices when listing, marketing or soliciting contracts, Bloomberg reported.
The warning specifically addresses American-style, or “moneyline,” odds commonly associated with sportsbooks.
Moneyline odds typically use positive or negative numbers to show potential returns on a $100 wager. Prediction markets generally price contracts in cents, with the price representing an implied probability of an event occurring.
A contract trading at 60 cents, for example, broadly reflects a market-implied 60% probability.
The CFTC cited research indicating that presenting wagers using American-style odds could encourage greater risk-taking in sports betting, according to Bloomberg.
The warning arrives as prediction markets increasingly move into territory traditionally dominated by sportsbooks.
Kalshi said it would comply with the regulator’s guidance. Polymarket and the CFTC did not comment on the report.
CFTC Chair Michael Selig has maintained that federally regulated prediction markets fall within the agency’s jurisdiction.
That position has triggered resistance from states, tribal gaming interests and gambling regulators concerned that federally regulated event contracts could effectively create an alternative route into sports wagering.
The distinction is becoming increasingly consequential as prediction markets grow.
Platforms such as Kalshi and Polymarket have reached multibillion-dollar valuations while attracting users to contracts covering elections, economics, sports and other real-world events.
The dispute has also reached Congress.
Some senators and tribal gaming representatives are seeking legislative language preserving state and tribal authority over sports betting.
The issue has surfaced during negotiations surrounding the Digital Asset Market Clarity Act, with supporters seeking language preventing federal commodities regulation from overriding existing gaming frameworks.
That effort faces opposition from lawmakers who argue prediction-market regulation should be addressed separately from crypto market-structure legislation.
The CFTC’s latest warning does not resolve the larger jurisdictional dispute.
Instead, its focus on how prediction contracts are displayed highlights an increasingly important regulatory question: At what point does a federally regulated event contract begin to look and behave like a conventional sports bet?
As prediction markets expand deeper into sports, the answer could determine not only how their products are marketed, but which regulators ultimately control one of the fastest-growing corners of speculative trading.
