CFTC Issues Warning to Prediction Markets Over “Moneyline” Betting Odds

TL;DR

• The CFTC warned prediction market platforms to avoid using American-style betting odds, describing them as “misleading.”
• The regulator sent letters to its regulated entities demanding legal compliance and requiring them to refrain from deceptive practices in advertising and user acquisition.
• Kalshi confirmed it will comply with the directive before the established deadline; Polymarket did not respond to requests for comment.

The Commodity Futures Trading Commission (CFTC) sent a formal warning to prediction market platforms under its jurisdiction to stop using American-style betting odds, known as moneyline odds, when presenting their contracts. The information was reported by Bloomberg, which had access to one of the letters sent by the regulator.

Moneyline odds express how much is won on a $100 bet using positive or negative signs. Prediction markets, on the other hand, operate with cent-based prices that directly represent the implied probability of an event. The conversion between both formats is mathematically straightforward, but the CFTC argues that presenting information in American format encourages greater risk-taking among users, citing a study referenced in the letter itself.

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