CFTC Tells Prediction Markets to Ditch American-Style Odds as Sports Betting Fight Escalates

The Commodity Futures Trading Commission has told prediction market platforms to stop displaying their contracts using American-style gambling odds, a move that comes as the federal regulator tries to draw a clearer line between financial exchanges and sports betting operators. The warning, first reported by Bloomberg, lands as the agency faces mounting legal pressure over its authority to oversee sports-related contracts.

According to the letter, the CFTC reminded its regulated entities that they must comply with U.S. laws governing derivative trades and avoid using “deceptive” practices to list, solicit, or advertise their products. The agency specifically flagged the use of plus-and-minus moneyline odds — the same format bettors see at any licensed sportsbook — as a prohibited way to market what are supposed to be exchange-traded contracts priced in cents on the dollar.

Cents vs. Moneylines: Why the Format Matters

On a traditional prediction market, a binary-outcome contract is priced based on implied probability. A “yes” share trading at 10 cents reflects roughly a 10 percent chance of that outcome occurring. Instead of leaving it there, some platforms have been converting those cent prices into familiar sports betting odds — that same 10-cent share showing up on screen as +900, functionally identical to what a bettor would see quoted on a moneyline at a licensed operator.

The CFTC’s letter argues that conversion is not simply cosmetic. The agency cited a study finding that presenting wagers in American-style odds format led to more risk-taking behavior among users compared to displaying implied probability directly. Regulators view that distinction as central to whether these platforms are functioning as legitimate derivatives exchanges or operating closer to unlicensed sportsbooks.

Industry Response and the Bigger Legal Fight

A Kalshi spokesperson confirmed the exchange will comply with the CFTC’s directive by its deadline, saying the platform “follows CFTC guidance” as a federally regulated entity. Polymarket did not respond to requests for comment, and as of Friday afternoon, multiple platforms including DraftKings Predictions were reportedly still displaying sports contracts with run lines, moneylines, and over/unders formatted in plus-minus style rather than share prices.

The odds-display warning arrives against a backdrop of escalating state-level challenges to prediction markets’ sports offerings. Kentucky sued both Kalshi and Polymarket in June, alleging the platforms were operating illegal sports betting businesses without a license. Complicating the picture further, a federal judge in Michigan ruled that sports prediction markets fall outside the CFTC’s regulatory umbrella entirely — a decision that cuts against the agency’s own claim of exclusive jurisdiction. The CFTC has not announced any enforcement actions tied to this latest warning, leaving open the question of how — or whether — it plans to compel compliance from platforms that keep the moneyline-style displays in place.

The dispute underscores a broader tension shaping the prediction markets space: exchanges like Kalshi and Polymarket have grown rapidly by offering products that look and feel like sports betting, while insisting they operate under a different regulatory framework entirely. Readers curious about that distinction can find a breakdown in this prediction markets vs. sports betting guide, which lays out how the two models diverge on licensing, taxation, and consumer protections.

What Comes Next

For now, the CFTC’s warning functions more as a shot across the bow than a hard mandate with teeth. No fines or suspensions have been announced, and platforms appear split on how quickly they’ll adjust their interfaces. But the letter adds another data point to a regulatory landscape that’s shifting fast, with state attorneys general, federal courts, and now the CFTC itself all weighing in on where prediction markets end and sports betting begins. How Kalshi, Polymarket, and their competitors navigate that squeeze over the coming months could shape whether the sector keeps expanding under its current model or is forced into a more heavily supervised structure resembling traditional prediction market regulation.

The timing is notable given how much capital and attention prediction markets have pulled in over the past year. Kalshi and Polymarket have both leaned heavily on sports contracts — wagers on game outcomes, championships, and player awards — to drive user growth, marketing those offerings in ways that intentionally echo the sportsbook experience bettors already know. That familiarity has been a selling point for onboarding new users, but it’s also the exact overlap regulators and state gaming commissions are now scrutinizing. If the CFTC’s odds-display directive holds and expands into something with real enforcement behind it, prediction markets could be forced to strip out the visual cues that made their sports products feel like a natural alternative to traditional betting apps in the first place, potentially reshaping how the entire category presents itself to users going forward.