CFTC cracks down on sports-betting style displays in prediction markets

The commission’s guidance, issued in early August, specifically targets the use of positive and negative odds—such as +150 or -200—which are hallmarks of the sports wagering industry. Federal regulators demand that registered entities ensure their marketing and solicitation practices remain distinct from the gambling sector. While the CFTC asserts exclusive jurisdiction over these event contracts under the Commodity Exchange Act, state officials are increasingly challenging that authority, arguing that sports-related wagers require local licensing.

This jurisdictional friction has manifested in high-stakes litigation, most notably in New York, where Attorney General Letitia James is seeking $36 billion from the platform Kalshi. Simultaneously, Kalshi is fighting for emergency relief in Utah, seeking to halt state-level enforcement while it appeals a court decision that allowed local anti-gambling laws to supersede federal registration. With 44 state attorneys general formally urging the CFTC to rewrite its rules, the industry faces a precarious period where federal oversight provides no guaranteed shield against aggressive state-level prosecution.