CFTC Urges Prediction Markets to Move Away From Sportsbook Style Odds

The Commodity Futures Trading Commission (CFTC) has warned federally regulated prediction market operators against displaying contracts using sportsbook style odds, saying the format could mislead users and create confusion over how these platforms operate.

The guidance focuses on the use of familiar betting formats such as +150 or -200 odds, which are commonly seen at sportsbooks. According to the CFTC, prediction markets should instead present contracts using prices or implied probabilities that reflect their status as regulated financial products under U.S. derivatives law.

Drawing a Clear Line Between Betting and Prediction Markets

The CFTC said the way contracts are presented is just as important as the products themselves.

By using sportsbook style odds, regulators believe prediction market platforms risk making their services appear too similar to traditional sports betting operators. The agency also reminded exchanges that event contracts must comply with federal derivatives rules and should not be marketed in a way that could be considered misleading or deceptive.

Instead, platforms are expected to display contracts using pricing models that reflect the probability of an event, reinforcing the distinction between prediction markets and sportsbooks.

Guidance Comes Amid Ongoing Legal Battles

The warning arrives as prediction market operators continue to defend their business models in courts across the United States.

Companies such as Kalshi are still saying that their event contracts fall under the CFTC's jurisdiction through the Commodity Exchange Act, while several states maintain that sports related contracts should be regulated as gambling products under state law.

Against that backdrop, the CFTC's latest guidance reinforces its view that federally regulated exchanges should look and operate like financial markets rather than sportsbooks.

A Growing Focus on Compliance

The guidance is expected to prompt prediction market operators to review how they display and promote sports event contracts.

As the sector continues to grow, regulators appear increasingly focused not only on the products themselves, but also on how they are presented to users. For operators, maintaining a clear distinction from traditional sportsbooks could become an increasingly important part of navigating the evolving regulatory landscape.

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