CFTC: Prediction Markets Must Not Use American Gambling Odds to Market Event Contracts
TechFlow news, August 8, according to Bloomberg, the U.S. Commodity Futures Trading Commission (CFTC) has sent letters to all exchanges offering event contracts, requiring regulated entities to comply with U.S. derivatives trading laws and not to engage in deceptive practices in contract listing, client solicitation, or advertising.
The CFTC explicitly stated that relevant platforms must not use American betting odds to market event contracts; derivative prices should be presented as notional amounts or percentages reflecting market pricing, rather than adopting the odds format commonly used by casinos and betting companies.
The CFTC believes that American odds may mislead market participants' understanding of the trading nature of related products and may be used to steer consumers towards betting products with higher profit margins.
Relevant Introducing Brokers, Futures Commission Merchants, and Designated Contract Markets must confirm receipt of the notice by August 31. Kalshi stated it will comply with the relevant requirements on schedule, while Polymarket has not yet responded to this.
