CFTC Warns Polymarket, Kalshi Against American-Style Gambling Odds Amid State Scrutiny

The U.S. Commodity Futures Trading Commission (CFTC) has issued a warning to its regulated entities that offer prediction markets over using American-style gambling odds. This comes as states continue to crack down on these platforms, alleging that they are operating unlicensed sports betting businesses.

CFTC Issues Warning To Prediction Markets Amid State Crackdown

According to a Bloomberg report, the regulator told these platforms to avoid using American-style gambling odds. It also reminded these entities about complying with U.S. laws governing derivative trades and avoiding using “deceptive” practices to list, solicit, or advertise the products.

The warning about the gambling odds comes as states have brought enforcement against prediction markets, arguing that they are offering illegal sports betting platforms through their sports contracts. On the other hand, the CFTC has continued to defend these platforms, arguing that it has exclusive jurisdiction over derivatives.

It is worth noting that New York is the latest to crack down on these platforms, with the state’s attorney general suing Kalshi for allegedly running an illegal, unlicensed gambling business. New York is seeking damages of up to $36 billion.

States such as Nevada have been able to secure a court order restricting these prediction markets from offering their sports contracts in the state. A federal court in Wisconsin also signaled that state gambling laws could regulate sports prediction markets in its ruling against the CFTC and Kalshi.

Kalshi Files New Motion Against Utah

Legal expert Daniel Wallach pointed out in an X post that Kalshi had filed an emergency motion for an injunction pending appeal with the Utah federal court. He noted that the top sports prediction market platform is seeking expedited relief out of fear that the state’s attorney general will file civil or criminal charges against the platform while the appeal is still pending.

BREAKING: Kalshi files an emergency motion for an injunction pending appeal with the Utah federal court, seeks expedited relief out of fear that @AGDerekBrown will file civil or even criminal charges against “Kalshi and its personnel” while the 10th Circuit appeal is pending. pic.twitter.com/ImrC2BOiSN

— Daniel Wallach (@WALLACHLEGAL) August 7, 2026

This follows a federal court ruling yesterday that Utah could enforce its anti-gambling laws against these prediction markets, including Kalshi. Earlier this year, Kalshi sued Utah to block the state from enforcing its gambling restrictions on the platform.

Kalshi has said that it will appeal the court’s ruling. Meanwhile, Utah’s Attorney General Derek Brown signaled that they would soon implement enforcement actions against these prediction markets but that they haven’t decided how just yet.