The U.S. Commodity Futures Trading Commission has warned prediction market platforms under its supervision not to use moneyline odds to display contracts, according to Bloomberg. The notice was sent on Aug. 7, and the agency said this betting-style format could mislead users about the kind of transaction they are entering.
CFTC says derivatives should not look like sports bets
Moneyline odds use plus and minus figures to show how much a bettor can win based on a fixed stake. The format is widely used in sports betting.
The CFTC said derivatives should be presented in nominal or percentage terms that reflect market pricing, not in a gambling-style display. The commission said that format “may cause market participants to misunderstand the nature of the transaction” they are making.
The agency also cited research linking moneyline odds with higher-risk behavior in sports wagering. Bloomberg’s report said CFTC Chair Michael Selig was a key figure behind the warning. Regulated entities must confirm by Aug. 31 that they received the notice.
Warning arrives during a legal fight over event contracts
The notice comes at a sensitive point for the industry. Several states have argued that sports-related event contracts are effectively unlicensed gambling. The CFTC, along with platforms such as Kalshi and Polymarket, has taken the position that these products are federally regulated derivatives.
By telling platforms to drop betting-style odds and use market-pricing language instead, the CFTC is making another move in that classification fight: these products are being framed as derivatives, not wagers.
ABMedia also noted that Chain News previously reported on a recent opinion piece by Selig arguing that the U.S. should lead in financial innovation. It also pointed readers to earlier explainer coverage on how prediction market odds work and the regulatory risks tied to the sector.