The US Commodity Futures Trading Commission has ordered regulated prediction markets to stop displaying prices in American-style bookmaker odds format. The regulator is working to separate the platforms from the sports betting industry amid lawsuits accusing them of illegal gambling.
The CFTC issued a letter banning the display of event contract prices using the '+' and '-' format that bookmakers use to show potential winnings. The regulator argues this presentation misleads users about the nature of the transaction and limits access to market depth information. Derivatives must be quoted in nominal or percentage terms that reflect market pricing.
The regulator stressed that market participants must present information so that an event contract is clearly identified as an exchange product under CFTC oversight, not a high-margin bookmaker product. Misleading users about pricing may violate federal law on manipulative practices.
The letter comes amid criticism that the CFTC's approach to regulating prediction markets has effectively legalised betting even in states where gambling is banned. This has triggered lawsuits across the country against major platforms such as Kalshi and Polymarket, which allow users to bet on sporting events, reality shows and geopolitical developments. The CFTC and prediction market operators maintain their contracts are financial derivatives fundamentally different from gambling and therefore fall under the commission's jurisdiction. Several states dispute this position, accusing the companies of operating as unlicensed gambling operators. Introducing brokers, FCMs and exchanges working with prediction markets must confirm receipt of the regulator's letter by 31 August.
