TLDR
- The CFTC warned prediction market platforms to stop using American-style moneyline betting odds
- The regulator told platforms to avoid “deceptive” practices when listing, advertising or soliciting products
- Kalshi said it will comply with the CFTC’s guidance by the letter’s deadline
- New York’s attorney general sued Kalshi for allegedly running an illegal gambling business, seeking up to $36 billion in damages
- A Utah federal court ruled the state can enforce its anti-gambling laws against prediction markets, including Kalshi
The U.S. Commodity Futures Trading Commission sent letters to its regulated prediction market platforms warning them not to use American-style gambling odds. The letters also reminded platforms to follow U.S. laws on derivative trades and avoid deceptive advertising practices.
JUST IN: CFTC warns prediction markets against using American-style gambling odds as the agency asserts its authority over sports event contracts, per Bloomberg.
The regulator said such odds may encourage greater risk-taking and told platforms to avoid deceptive listing,… pic.twitter.com/XGConBPlim
— Coin Bureau (@coinbureau) August 7, 2026
American-style odds, known as moneyline odds, show potential winnings on a $100 bet using plus or minus signs. Prediction markets typically display prices in cents that reflect the implied probability of an event.
The CFTC cited a study in its letter showing that American-style odds led to more risk-taking in sports betting. The agency has long argued it holds exclusive jurisdiction over prediction markets.
Kalshi confirmed it received the letter and said it would comply by the deadline. Polymarket and the CFTC did not respond to requests for comment.
State Crackdowns Intensify
The warning comes as states ramp up pressure on prediction market platforms. New York’s attorney general filed a lawsuit against Kalshi, accusing the company of running an illegal, unlicensed gambling business. The state is seeking damages of up to $36 billion.
Nevada has also secured a court order blocking prediction markets from offering sports contracts in the state. A federal court in Wisconsin signaled that state gambling laws could apply to sports prediction markets.
In Utah, a federal court ruled yesterday that the state can enforce its anti-gambling laws against prediction markets, including Kalshi. Kalshi had previously sued Utah to block those restrictions and said it will appeal the ruling.
Legal expert Daniel Wallach noted on X that Kalshi filed an emergency motion for an injunction in Utah federal court. The company is seeking expedited relief, fearing the state’s attorney general could file civil or criminal charges while the appeal is pending.
Utah Attorney General Derek Brown said enforcement actions are coming soon, though the state has not yet decided on the specific approach.
CFTC Pushes Back on State Authority
CFTC Chair Michael Selig has repeatedly argued the agency holds broad statutory authority over prediction markets. He has sued several states to defend that position and launched a formal rulemaking effort.
Kalshi and Polymarket have both supported CFTC oversight of their businesses. Both platforms have reached multibillion-dollar valuations as their popularity has grown.
Some senators and tribal gaming regulators are now pushing for legislation that would protect states’ authority over sports betting. That effort aims to prevent prediction markets from moving into territory traditionally controlled by states.
The Utah ruling is the most recent legal setback for Kalshi, coming just days after the state’s court decision. Kalshi’s appeal will be the next key moment to watch in this ongoing legal fight.
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