CFTC Tells Polymarket & Kalshi: Stop Quoting Odds Like a Vegas Sportsbook 🎲

The U.S. Commodity Futures Trading Commission has issued a warning to CFTC-regulated prediction market operators, including Polymarket and Kalshi, advising them to stop quoting American-style gambling odds in connection with event contracts. The regulator also reminded the entities that they must comply with U.S. laws governing derivatives trades and refrain from using "deceptive" practices to list, solicit, or advertise such products.

The warning comes as multiple U.S. states have filed enforcement actions against prediction market platforms, alleging that sports-related contracts amount to unlicensed sports betting. According to a Bloomberg report cited by industry coverage, the CFTC's guidance is intended to clarify the line between CFTC-supervised derivatives activity and wagering-style offerings that fall under state gambling oversight.

The CFTC, which has jurisdiction over swaps, futures, and certain event contracts, has continued to defend its oversight of designated contract markets while acknowledging the parallel state-level investigations. The agency's latest communication reiterates that prediction markets operating as CFTC-regulated venues must structure and market their contracts in a manner consistent with derivatives regulation rather than sportsbook conventions.

Industry coverage noted that the regulator did not announce any new enforcement actions in tandem with the warning. The CFTC also has not specified a deadline by which Polymarket, Kalshi, or other regulated prediction market operators must alter their odds formats or marketing practices.

Polymarket and Kalshi have previously argued that their event contracts constitute swaps or other derivatives under federal jurisdiction and are therefore subject to CFTC oversight rather than state gambling laws. State regulators in jurisdictions including New York, New Jersey, Illinois, and Nevada have disagreed, filing actions that contend the platforms are functioning as sportsbooks without the required state licenses.

The CFTC's warning adds a federal dimension to the dispute without immediately resolving the jurisdictional clash between the agency and state authorities. The regulator indicated that prediction market operators should review their odds presentation and advertising materials to ensure alignment with derivatives law and CFTC guidance.