WASHINGTON, August 7, 2026 — The Commodity Futures Trading Commission’s market oversight and market participants divisions warned regulated entities that using “American odds” to display event-contract prices is likely to mislead market participants, raising potential concerns under federal prohibitions on manipulative and deceptive practices.
The warning came in a staff letter addressing how CFTC-regulated event contracts are presented and marketed. The Division of Market Oversight and Market Participants Division asked entities involved in listing, soliciting or accepting orders for such products to review their pricing displays and marketing practices, including information used by partners and affiliates, and confirm receipt of the letter by August 31.
Event-contract pricing
CFTC staff said it is concerned about reports of potential violations involving event contracts, including regulated products being marketed using the American-odds format associated with casino gambling bookmakers rather than nominal or percentage terms reflecting market prices.
According to the divisions, bookmaker-style odds can obscure important characteristics of an exchange-traded derivatives transaction, potentially limiting users’ ability to assess market depth and the pricing impact of their trades. Staff also warned that confusion between the two models could be used to steer customers toward higher-margin bookmaking products whose prices are not determined by the market.
The letter contrasted that model with regulated derivatives markets, where counterparties trade at market-determined prices and transactions are centrally cleared. Event-contract prices are established through competitive bidding among market participants, while order books generally provide real-time bid and ask information.
Staff said that transparency allows prediction markets to aggregate information from participants and perform price- and information-discovery functions.
Regulatory obligations
The divisions grounded their warning in existing restrictions on deceptive conduct, including Section 9 of the Commodity Exchange Act and CFTC Regulation 180.1. Those provisions prohibit certain manipulative, fraudulent and materially misleading conduct in connection with swaps.
Staff said firms listing, soliciting or accepting orders for event-contract derivatives must provide information that accurately communicates the nature of the product. The letter also pointed to DCMs’ responsibility to protect market participants from abusive, noncompetitive or unfair conduct involving other parties to transactions.
The divisions extended that focus beyond exchanges themselves, saying DCMs are expected to ensure that intermediary market participants, affiliates and partners uphold regulatory standards and promote a clear understanding of the products offered in their markets. Relevant entities are also expected to examine their broader marketing and informational practices for compliance.
Pricing and marketing review
CFTC staff requested that regulated entities involved in event-contract derivatives review their pricing displays, marketing materials and other information, including material displayed or used by partners and affiliates. They were asked to confirm receipt of the letter by August 31, 2026.
Introducing brokers and futures commission merchants were asked to send confirmations to the Market Participants Division, while designated contract markets were asked to confirm receipt with the Division of Market Oversight.
The letter was signed by DJ Hennes, director of the Market Participants Division and acting director of the Division of Market Oversight.
Why it matters
The warning sharpens the regulatory distinction between exchange-traded event contracts and traditional bookmaking. CFTC staff focused on competitive price formation, order-book transparency and market information as characteristics that distinguish regulated derivatives markets from products whose odds are set by bookmakers.
The letter also shows that regulatory scrutiny can extend beyond the structure of an event contract to how the product is presented to customers. By calling for reviews of pricing and marketing practices across intermediaries, affiliates and partners, staff is signaling that customer-facing presentation is part of the compliance framework surrounding regulated event-contract markets.
