Advisory on Pricing Formats Replaces American Odds

Operators received notice that they must present prices in cents or percentages rather than the plus-minus format common in sportsbooks, because the CFTC determined that American odds can create confusion for participants who encounter them on platforms regulated as exchanges instead of traditional betting venues; the guidance specifies that traditional exchange-style pricing reduces the risk of misleading consumers about the true cost and payout structure of each contract.

Market makers now face requirements to convert all displayed odds into decimal or percentage equivalents that align with commodity exchange conventions, and this shift applies directly to sports-related event contracts where participants predict outcomes such as game winners or point spreads; the advisory notes that cents-based pricing allows clearer comparison across different contracts and avoids the interpretive steps required when reading +122 or -117 lines.

Conflicts of Interest Addressed in Second Advisory

The second advisory examines situations where affiliated entities act simultaneously as market makers and exchanges, a structure that appears in operations involving companies such as Kalshi and DraftKings; regulators outlined expectations for disclosure and separation of functions to prevent one entity from gaining unfair informational or pricing advantages over other participants.

Under the guidance, platforms must implement controls that keep market-making activities distinct from exchange operations, including rules on order handling, price discovery, and information flow between related companies; the advisory emphasizes that such separation protects the integrity of the market and ensures all traders operate under consistent rules regardless of their relationship to the platform operator.

Operational Changes for Sports Prediction Contracts

Prediction market platforms listing sports contracts will update their user interfaces to reflect the new pricing requirements, and those changes will appear first in states where prediction markets operate without overlapping full sports betting authorization; operators must revise marketing materials and contract descriptions to align with the cents or percentage format before the next compliance deadline.

Entities that combine market-making and exchange roles will conduct internal reviews of their governance structures and may need to establish additional firewalls or third-party oversight arrangements; the advisory provides a framework for self-assessment that companies can follow to demonstrate compliance with conflict-of-interest standards.

Participants in these markets will notice differences in how prices appear on screens and in settlement calculations, yet the underlying contract mechanics remain tied to the same event outcomes; platform teams have begun mapping current American-odds displays to equivalent percentage values so that existing positions convert without altering economic exposure.

Scope Limited to CFTC-Regulated Platforms

The advisories apply only to platforms registered with or overseen by the CFTC, leaving state-licensed sportsbooks and other non-CFTC entities outside the immediate scope of these particular communications; observers note that this distinction creates a segmented regulatory environment where prediction markets follow one set of display and governance rules while traditional sportsbooks follow another.

Companies operating across both categories must maintain separate compliance tracks for each line of business, and the CFTC communications clarify that prediction market contracts remain subject to the agency's authority even when the underlying events resemble those covered by state sports betting laws.