CFTC Tells Prediction Markets to Ditch Sportsbook-Style Odds Displays
US regulator warns Kalshi and rivals that plus/minus odds could mislead traders, as legal fights over prediction markets and gambling law continue.
This article was produced with AI assistance and edited by the ON360 newsroom.
The U.S. Commodity Futures Trading Commission (CFTC) has told prediction market operators to stop displaying event-contract prices using the plus-and-minus “American odds” format long associated with sportsbooks, warning that the practice could mislead traders and breach federal rules against manipulative conduct.
According to Gambling Insider, the warning came in a joint letter from the CFTC’s Division of Market Oversight and its Market Participants Division, sent to exchanges, brokers and other regulated firms that list or handle event contracts. The letter said pricing displays must be “clear and accurate” and warned that sportsbook-style formatting “is likely to mislead market participants about the nature of the transaction into which they are entering,” potentially depriving them of information about market depth and pricing impact.
American odds present a wager as a number preceded by a plus or minus sign — for instance a favourite at -110 or an underdog at +200 — showing either the stake needed to win $100 or the profit from a $100 bet. The CFTC wants firms to instead quote event contracts in nominal or percentage terms that reflect actual market pricing, rather than borrowing sports-betting shorthand.
A consumer-protection and market-integrity issue
The regulator framed the odds-format question as more than cosmetic. Gambling Insider reports that the letter cautioned confusion between derivatives and sportsbook products could be exploited to push consumers toward “higher-margin, non-market-priced bookmaking products,” and that misleading pricing on a regulated product could run afoul of federal prohibitions on manipulative devices.
A footnote in the letter cited research suggesting American odds-style presentation encourages greater risk-taking among sports bettors, according to the outlet. CFTC-regulated entities involved in listing, soliciting or accepting orders for event contracts — including practices used by partners and affiliates — are being asked to review their pricing displays and marketing materials, and to confirm receipt of the notice by August 31.
Prediction markets under legal pressure
The intervention lands amid an intensifying legal battle over whether platforms such as Kalshi are offering legitimate federally regulated derivatives or, as several state regulators allege, illegal sports betting dressed up as swaps. Courts remain split on whether the Commodity Exchange Act pre-empts state gambling law, with recent rulings in Michigan and Nevada forcing Kalshi to restrict certain event contracts, while decisions in New Jersey, Arizona and Tennessee have favoured the CFTC’s position, per Gambling Insider.
The CFTC has filed lawsuits against several states, including New York, New Mexico and Kentucky, and has submitted amicus briefs defending its claim of exclusive federal jurisdiction over event contracts. Critics argue the agency’s embrace of federally regulated prediction markets has allowed sports-style wagering to spread into states that otherwise prohibit gambling.
By pressing operators to visually distinguish market-priced derivatives from bookmaker-priced wagers, the CFTC is reinforcing the line the industry itself has used to argue for legitimacy — even as it tightens oversight of how those products are marketed to everyday users.
Why it matters north of the border
Ontario’s regulated sports betting market operates under a different framework entirely, with the AGCO licensing operators and iGaming Ontario overseeing conduct standards, including mandated responsible-gambling tools such as deposit limits and self-exclusion. Still, the U.S. prediction-markets fight is being watched closely by Canadian industry observers as it could shape how similar contract-based products are eventually treated if they seek to enter regulated Canadian markets.
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