CFTC warns: Event contracts displaying "American odds" may be misleading, and must clearly disclose derivative pricing information.

The U.S. Commodity Futures Trading Commission (CFTC)’s Division of Market Oversight and Division of Market Participants jointly released a letter reminding all regulated entities involved in event contract listing, solicitation or acceptance to clearly disclose derivative pricing information and refrain from misleading consumers. Regulators specifically warned that presenting pricing information in the "American odds" format may mislead market participants about the nature of trades, and could prevent users from accessing key metrics such as market depth and pricing impact. Earlier, Kalshi faces New York state charges over event contracts, while Polymarket has also come under regulatory scrutiny for its settlement mechanisms and false advertising. The CFTC’s latest warning further clarifies the compliance boundaries for prediction markets. The CFTC stressed that information displayed by market participants—including pricing details—must indicate to consumers that the product is an event contract traded on a CFTC-regulated exchange, not a product with higher profit margins and non-market pricing. Regulated entities must uphold regulatory standards by overseeing intermediary market participants, affiliates and partners; displaying misleading pricing information may violate federal laws prohibiting manipulative practices.