CFTC Encouraging Prediction Market Sites to be Un-American
Jesse M. Cox Published 14/08/2026
The Commodity Futures Trading Commission (CFTC) is advising prediction market sites not to utilize American odds when posting sports-event contracts on their sites. This directive was announced in a letter circulated to all prediction market sites operating in the US market. American odds are the most commonly used format employed by US-licensed sports betting operators to post the betting line odds on their platforms. These betting lines feature a plus or minus sign in front of a number.
The guidance, issued in a staff letter, directs platforms to mark contracts in nominal or percentage terms instead. The CFTC is the federal regulator of all prediction market sites.
The CFTC worries that prediction market sites may be misleading customers
In issuing its letter, the CFTC stated in a release that the intended message was "to remind Commission-regulated entities involved in the listing, soliciting, or acceptance of event contracts of their responsibility not to mislead consumers, including the obligation to display clear and accurate pricing information for derivatives products."
Continuing, the memo from the CFTC went on to warn prediction market sites like Kalshi and Polymarket that making use of American odds would lead to their derivative trades looking too much like the line on a sports betting site.
"Registered entities and persons must uphold regulatory standards and foster clear understanding of the products offered within CFTC-regulated markets, including through the oversight of intermediary market participants, affiliates, and partners," reads the CFTC release.
"Displaying pricing information in the “American” odds format used by casino gambling bookmakers is likely to mislead market participants about the nature of the transaction and may deprive users of access to indicia of market depth and pricing impact."
How do American odds work?
The so-called American odds are given that name because it is the format most preferred in the US legal and regulated sports betting market. You might see a moneyline on an NFL game at an online sportsbook that reads Philadelphia -150 at Dallas +200.
The minus sign indicates the favorite, while the plus sign is attached to the underdog. The line is based on a hypothetical $100 wager. If you bet $100 on the Cowboys at +200 and they won, you would realize a $300 return. You'd get your $100 stake back, plus a $200 profit.
Odds listed with a minus sign show how much you would need to bet to realize a $100 profit. At -150, a $150 winning bet on the Eagles would bring you $250. You'd get a $100 profit and the return of your $150 stake.
The CFTC suggests that using American odds on an event contract could be illegal
The use of American odds by prediction markets on event contracts will make them look like sports betting. That's one concern. However, there's another worry. The CFTC believes that it may be against the law.
"The divisions reminded regulated entities and persons that displaying misleading pricing information in connection with any regulated product risks violating federal law prohibiting the use of manipulative devices," the CFTC release noted.
Instead, the CFTC is calling for the use of nominal or percentage terms when marking potential payouts on event contracts. A prediction market platform continuously assesses the collective sentiment of its users regarding the likelihood of an event resulting in a "Yes" or "No" outcome. This probability is expressed as a percentage. That percentage can range from 0% (certain not to happen) to 100% (certain to happen).
Nominal value is the percentage expressed in monetary terms. For example, $0.20 would indicate there's a 20% chance of this outcome happening. It would cost you $0.20 to purchase this contract. If you win the trade, the payout is $1, so you would realize an 80% profit.