TLDR
- The CFTC warned prediction market platforms to stop displaying prices using plus-and-minus sportsbook odds.
- The agency says this format can mislead traders about what they are actually buying.
- Firms must show prices in nominal or percentage terms instead.
- Regulated entities must confirm they received the warning by August 31.
- The move comes as courts across several states debate whether prediction markets count as gambling.
The Commodity Futures Trading Commission has told prediction market platforms to stop pricing their event contracts like sportsbooks. The agency says the plus-and-minus odds format, familiar from sports betting apps, can confuse traders.
The warning came in a joint letter from two CFTC divisions. It was sent to exchanges, brokers, and other firms that list or handle event contracts.
The letter says pricing must be clear and accurate. It warns that odds-style displays can hide how deep a market is or how a trade might move prices.
What the CFTC Objects To
American odds use a plus or minus sign followed by a number. A favorite might be listed at -110. An underdog might show +200.
The CFTC says this format does not reflect actual market pricing. It wants firms to use nominal or percentage terms instead.
The agency argues that sportsbook-style numbers can steer people toward products that are not priced by the market. It called these “higher-margin, non-market-priced bookmaking products.”
A footnote in the letter pointed to research showing that this odds format can encourage bettors to take on more risk.
Firms that ignore the guidance could face legal trouble. The CFTC says misleading pricing displays may violate federal rules against manipulative trading practices.
A Legal Battle Over Definitions
Regulated firms must review their pricing, marketing materials, and partner practices. They need to confirm receipt of the letter by August 31.
This is not the CFTC’s only fight right now. The agency is defending event contracts against lawsuits in several states that call them illegal gambling.
The CFTC has sued states including New York, New Mexico, and Kentucky. It argues that federal law gives it sole authority over these contracts.
Courts have not agreed on this point. Rulings in Michigan and Nevada went against the agency, forcing Kalshi to limit certain contracts in those states.
Other courts have sided with the CFTC. New Jersey, Arizona, and Tennessee have all issued favorable rulings for prediction market operators.
Critics say the CFTC’s support for these markets has let betting spread into states that ban gambling. They argue the agency is blurring the line between derivatives and wagers.
The CFTC’s position is that event contracts are market-priced financial products. Sportsbooks, by contrast, set their own prices as the bookmaker.
By pushing platforms to drop sportsbook-style odds, the agency is trying to make that distinction clearer to everyday traders. The letter treats this as a matter of consumer protection, not just formatting.
