The @CFTC has sent letters to its regulated prediction market operators instructing them to stop displaying American-style moneyline odds, warning that the format constitutes a "deceptive" pr
The @CFTC has sent letters to its regulated prediction market operators instructing them to stop displaying American-style moneyline odds, warning that the format constitutes a "deceptive" practice in the listing, advertising, and soliciting of event contracts, according to Bloomberg, which obtained the letter.
The core issue is behavioural. The agency cited research finding that the familiar plus-minus odds format used in sportsbooks drives more risk-taking than probability-based pricing, where contracts trade in cents equivalent to implied probability. On a prediction market using probability pricing, a contract priced at 30 cents reflects a 30 percent chance of the event occurring. The CFTC argues that presenting the same information as a moneyline encourages users to think and act like gamblers rather than derivatives traders.
That distinction is not merely cosmetic. CFTC Chair Michael Selig (@ChairmanSelig) has repeatedly argued that the agency holds "exclusive jurisdiction" over prediction markets. That claim rests on the legal position that event contracts are financial instruments regulated under the Commodity Exchange Act, not bets subject to state gaming law. Allowing platforms to display sportsbook-style odds could undercut that argument by making the products look and feel like conventional sports wagers.
The letter lands in the middle of a broader regulatory fight. Senators have pushed to preserve state and tribal control over sports betting by seeking changes to the Clarity Act as Congress weighs federal crypto market legislation. At a Senate Indian Affairs Committee roundtable, Indian Gaming Association Vice Chairman Tehassi Hill urged lawmakers to amend the Clarity Act to block "sports and casino gambling through prediction markets" and clarify that state and tribal gaming laws govern those markets.
Without explicit carve-out language, gaming associations argue the bill's passage could entrench an arrangement in which platforms like Kalshi and Polymarket operate outside state gambling law. Prediction market operators, for their part, have lobbied against any such carve-out, arguing that event contracts are derivatives products properly regulated by the CFTC.
Kalshi said it will comply by the letter's deadline. Polymarket did not comment.
Sources:CFTC Staff Issues Prediction Markets Advisory (CFTC.gov)Senators push Clarity Act changes on prediction market jurisdiction (Crypto.news)Tribal gaming regulators and senators push Clarity Act prediction markets provision (The Block)
