CFTC Warns Prediction Markets: Ditch American-Style Odds

The Commodity Futures Trading Commission (CFTC) has issued new guidance to prediction market platforms, advising them against using American-style odds. The CFTC has drawn the line clearly as to what these platforms can and cannot do.

The CFTC maintains that certain phrasing could be misleading or deprive participants of the depth of the experience. The watchdog, through its Division of Market Oversight and the Markets Participants Division, told these platforms to be wary of using what the regulator described as "American" odds format, which is commonly associated with "casino gambling bookmakers." This is the (+) and (-) used to denote traditional sports bets, which have drawn a lot of criticism from observers when applied to prediction markets.

The CFTC argued that sports betting language and terminology likely mislead participants of the nature of the transaction and may deprive users of access to indicia of market depth and pricing impact, maintaining that trading on sports outcomes is different than betting on those same outcomes.