CFTC Warns Prediction Markets to Drop Moneyline Odds

The CFTC has started a rulemaking process to define how event contracts should be regulated. Selig has maintained that existing federal law gives the commission broad authority over the sector, including contracts linked to sporting events. Forty-four state attorneys general have challenged the CFTC's authority over sports markets.

For Kalshi and Polymarket, the warning creates a compliance question. Both companies have supported federal oversight as a more consistent framework than dealing with gambling regulators in dozens of states. That approach becomes especially valuable as sports contracts grow as a share of prediction market activity. The CFTC's latest move shows that federal supervision does not mean platforms can use the same conventions as sportsbooks on pricing and advertising.

The practical issue for both companies is whether they can keep the ease of use that helped sports prediction markets attract mainstream customers while staying clearly distinct from gambling products. Kalshi faces potential adjustments to how some markets are promoted. Polymarket's response remains unclear.

The next phase may move toward Congress. Senators and tribal gaming regulators have started pushing for legislative language that would preserve state authority over sports betting and limit how far prediction markets can expand into areas already covered by gambling laws. If lawmakers adopt that approach, sports-related markets could face additional restrictions or carve-outs, creating a different business model from the one prediction platforms currently advocate.

The CFTC's rulemaking process continues. No specific deadline for the moneyline odds compliance has been set, the agency indicated.