CFTC warns prediction markets over gambling-style odds
The CFTC has warned regulated prediction markets against displaying American-style gambling odds as state authorities intensify efforts to classify sports event contracts as unlicensed betting. CFTC warns prediction markets over odds displays The Commodity Futures Trading Commission instructed regulated prediction market platforms not to display contracts using American-style gambling odds, according to an Aug. 7 Bloomberg report. American odds typically show potential returns using positive and negative numbers, such as +150 or -200. Sportsbooks commonly use this format, while prediction markets usually price contracts between $0 and $1 based on the implied probability of an event. The CFTC also reminded registered entities that event contracts remain subject to U.S. derivatives laws. Platforms must avoid “deceptive” practices when listing, advertising, or soliciting trades in these products. The guidance suggests that federal registration does not allow prediction markets to advertise their products in a manner that makes them indistinguishable from conventional sportsbooks. It comes as the agency continues defending its authority over event contracts against state gaming regulators. The CFTC maintains that designated contract markets fall under its exclusive jurisdiction through the Commodity Exchange Act. State officials argue that contracts tied to sporting events constitute wagers and require local gambling licenses. State lawsuits challenge CFTC jurisdiction New York became the