Securities Regulation Daily Wrap Up, CFTC NEWS AND SPEECHES—CFTC warns prediction markets to stop displaying gambling-style odds, (Aug 10, 2026)

By Suzanne Cosgrove

Displaying pricing information in the “American” odds format used by casino gambling bookmakers is likely to mislead market participants, the CFTC said.

The CFTC’s Division of Market Oversight (DMO) and the Market Participants Division (MPD) have issued a letter warning Commission-regulated platforms that list, market, or accept event contracts of their responsibility not to mislead consumers, including their obligation to display clear, accurate pricing information for derivatives products.

Market participants must display information, including pricing information, that indicates to consumers when a product is an event contract on a CFTC-regulated exchange, rather than a higher-margin, non-market-priced bookmaking product, the CFTC said in a release.

“DCMs, in particular, have an obligation to protect market participants from abusive, noncompetitive, or unfair actions by other parties involved in the transaction,” the CFTC said.

Better Markets weighs in. “Prediction markets used to advertise themselves as offering the ability to bet on sports, but when they realized that made them sound like sportsbooks, they switched to saying they offer the ability to ‘trade’ on sports,” commented Benjamin Schiffrin, director of securities policy for Better Markets.

“This shouldn’t fool anyone, as nobody trades on sports. People bet on sports, and that is what event contracts on sporting events let people do,” Schiffrin said. Betting on the Super Bowl, the Masters, or the World Cup is not trading a financial derivative, he added.

Potential violations.In its letter, the Commission staff said it “is concerned by reports of potential violations by entities involved in the listing, soliciting, or acceptance of event contracts,” including that some CFTC-regulated products are being marketed not in nominal or percentage terms that reflect market pricing, but in the “American odds” format used by casino gambling bookmakers.

The CFTC said the prohibition against deceptive practices applies to all activities related to advertising, listing, or otherwise transacting swaps that are likely to cause consumer confusion regarding the product being traded.

Displaying pricing information for derivatives products in bookmaker-style odds is likely to mislead market participants about the nature of the transaction into which they are entering, the Commission said. Further, market participant confusion between the two products could be exploited to drive participants into higher-margin, non-market-priced bookmaking products.

By directly displaying derivative contract prices instead, market participants are provided with accurate and relevant information, and it reflects that the prices of the derivatives products are determined by market forces on a regulated exchange, the CFTC said.

Confirmation required. DMO and MPD said they expect that all entities, businesses, and persons engaged in the marketing and trading of derivative products will uphold regulatory standards and will foster a clear understanding of the products offered within their markets.

DMO and MPD also said they expect that DCMs will ensure that their intermediary market participants, affiliates, and partners do the same. These entities are expected to assess their other marketing and informational practices to ensure those practices meet their regulatory obligations.

In addition, DMO and MPD requested CFTC-regulated entities that list, solicit, or accept orders for event contract derivatives products review their pricing displays, marketing materials, and other information, as well as information displayed by partners and affiliates, and confirm receipt of the CFTC’s letter by August 31, 2026.

RegulatoryActivity: BrokerDealers CFTCNews Derivatives ExchangesMarketRegulation