CFTC Issues Advisories on Prediction Market Pricing Formats and Operator Affiliations
Written by Freya Müller · Aug 25, 2026
CFTC Issues Advisories on Prediction Market Pricing Formats and Operator Affiliations
The Commodity Futures Trading Commission released two targeted advisories in August 2026 that address how certain prediction contracts must be presented to the public and how affiliated companies may structure their operations, and these measures apply directly to platforms such as Kalshi and Polymarket that offer contracts on sports outcomes.
Advisory on Contract Pricing Presentation
One advisory instructs operators to discontinue the use of American odds formats such as +122 or -117 when displaying CFTC-regulated prediction contracts, and it requires instead the traditional commodities-exchange pricing structure expressed in cents such as 45 cents or 54 cents. The guidance states that American odds can create confusion for participants who are accustomed to commodity market conventions, and it emphasizes that standardized cent-based pricing reduces the risk of misleading consumers about the actual cost and payout structure of each contract.
Regulated entities must adjust their interfaces and marketing materials to reflect this requirement before offering new contracts, while existing listings that rely on American odds face a transition period outlined in the advisory itself. Platforms that previously mirrored sportsbook conventions now need to reprogram display systems so that every contract shows the purchase price as a decimal fraction of one dollar.
Conflicts of Interest in Dual-Role Operations
The second advisory examines situations where affiliated entities serve simultaneously as both market maker and exchange operator, and it highlights potential conflicts that arise when one company or its parent controls liquidity provision while also managing the trading venue. The document specifically references arrangements involving Kalshi and DraftKings, noting that such structures require clear separation of functions and transparent disclosure to prevent any appearance that one side of the affiliation receives preferential treatment.
Operators must demonstrate that order-matching systems remain impartial and that market-making activities do not advantage affiliated trading desks over other participants, and the advisory directs companies to implement compliance procedures that document these safeguards on an ongoing basis. Failure to maintain separation could result in additional regulatory scrutiny or restrictions on the types of contracts that may be listed.
State-Level Implications Ahead of Football Season
States such as California and Texas that have recently begun authorizing prediction markets now face additional compliance steps before contracts tied to the upcoming football season can launch, because platforms must align their pricing displays and corporate structures with the new federal guidance. Regulators in those jurisdictions are expected to incorporate the CFTC advisories into their own licensing reviews, which means operators seeking approval will need to submit revised user interfaces and conflict-of-interest policies as part of their applications.
The timing places pressure on companies that had planned extensive marketing campaigns around college and professional football schedules, since any delay in achieving compliance could push contract availability past the opening weeks of the season. Observers note that several platforms have already begun internal audits to verify that their pricing engines and affiliate agreements meet the outlined standards.
Broader Context for Prediction Market Operators
Prediction market platforms that blend elements of traditional betting with commodity-style contracts have expanded rapidly in recent years, yet the CFTC continues to treat these products as derivatives subject to its jurisdiction. The August 2026 advisories build on earlier statements that clarified which event contracts qualify for CFTC oversight and which remain outside its scope, and they reinforce the agency’s position that standardized pricing and conflict management form core elements of fair market operation.
Companies named in the guidance, along with others that use similar formats, now have a clear roadmap for adjusting their systems, although the precise timeline for full implementation varies depending on the volume of contracts that must be converted and the complexity of existing affiliate relationships. Legal teams at multiple firms are reviewing the documents to determine whether additional disclosures or structural changes will be necessary before football-related contracts can be offered in newly authorized states.
Conclusion
The two CFTC advisories issued in August 2026 establish specific requirements for pricing presentation and operational separation that directly affect how sports prediction contracts reach consumers in states such as California and Texas. Operators including Kalshi and Polymarket must adapt their displays to cent-based formats and address any dual-role affiliations, and these changes will shape the availability and structure of contracts ahead of the football season. The guidance links to the full text of the advisories can be found through official CFTC channels, providing detailed compliance expectations for all regulated entities.