CFTC warns prediction markets over gambling-style odds
The CFTC warns regulated prediction markets against using American-style gambling odds amid state efforts to classify sports event contracts as unlicensed betting.Summary
The Commodity Futures Trading Commission (CFTC) has issued a warning to regulated prediction market platforms, instructing them not to display contracts using American-style gambling odds. This guidance comes as state authorities intensify efforts to classify sports event contracts as unlicensed betting, arguing that such contracts constitute wagers requiring local gambling licenses. The CFTC maintains that designated contract markets fall under its exclusive jurisdiction through the Commodity Exchange Act, but state officials, including New York Attorney General Letitia James who has sued Kalshi seeking at least $36 billion, disagree. The dispute has led to legal challenges from 44 states and court rulings, such as a Wisconsin federal court rejecting the CFTC's request to prevent state authorities from applying gambling laws to prediction platforms. Kalshi, a regulated prediction market, has sought emergency protection from Utah enforcement while pursuing an appeal. The CFTC's warning underscores that federal registration does not shield prediction market operators from compliance obligations, as evidenced by the agency's recent enforcement actions against former U.S. Representative George Santos for trading on Kalshi contracts.
(Source：Crypto News)