CFTC Cautions Prediction Markets Over American-Style ‘Moneyline’ Betting Odds
The Commodity Futures Trading Commission has warned some prediction market platforms against using American-style gambling odds. The agency is seeking to assert its jurisdiction over sports betting, according to Bloomberg.
CFTC Issues Warning Letters
The CFTC sent letters to its regulated entities. Officials instructed them to comply with the law and avoid “deceptive” practices when listing, advertising, or soliciting products. Bloomberg reported the details on Friday after obtaining one of the letters.
American-style gambling odds, also called moneyline odds, display potential winnings on a $100 bet using a plus or minus sign. Prediction markets typically show prices in cents that reflect implied probability. These prices convert to American odds through simple formulas. Prices under 50 cents become positive odds, while prices over 50 cents become negative.
The CFTC cited a study in its letter. The research found that American-style wagers led to higher risk-taking in sports betting.
Platform Responses
A Kalshi spokesperson confirmed the platform follows the agency’s guidance. “As a federally regulated exchange, Kalshi follows CFTC guidance and will comply with the letter by its deadline,” the spokesperson said in an emailed statement.
Polymarket and the CFTC did not respond to requests for comment.
CFTC’s Push for Exclusive Jurisdiction
Over the past year, CFTC Chair Michael Selig has maintained that the agency holds exclusive jurisdiction over the rapidly expanding prediction markets. He has even sued several states to defend that position.
Selig has also launched a rulemaking effort. He argues that the CFTC’s statutory authority is broad enough to oversee the industry. Some states disagree. They contend that prediction platforms violate local gaming and gambling laws, especially those governing sports betting.
Growing Popularity of Prediction Markets
Prediction market platforms such as Polymarket and Kalshi have surged in popularity. Both companies now carry multibillion-dollar valuations. They have advocated for CFTC oversight of their businesses.
More recently, senators and tribal gaming regulators have pushed for legislative language. Their goal is to preserve states’ authority over sports betting and prevent prediction markets from expanding into that area.
The CFTC’s latest warning highlights the ongoing tension between federal oversight and state control of betting-related markets.
