Polymarket’s U.S.-facing platform plans parlay-style wagers, which it is calling a “Combinatoric Athletic Outcome Contract” or “CAOC,” according to a CFTC filing on Wednesday, May 20.

As the prediction market platform continues its long-delayed U.S. rollout, new parlay-style wagering will help it compete with rival Kalshi, the leading player in the nascent sector.

Kalshi users reportedly have lost more than $100 million on these wagers in 2026. The operator calls its parlays “combos” and prominently promotes them in its app.

Parlays are the Cash Cow of the Betting Industry

For traditional sports betting apps, parlays generate the lion’s share of revenue.

These bets involve combining multiple outcomes into a single wager to increase odds and potentially yield a larger payout. More often than not, bettors lose money.

These bets are more lucrative for operators than straight bets, such as simply who will win a game.

Parlays commonly involve player prop bets.

Why is Polymarket Calling a Parlay a ‘CAOC’?

The federal government regulates prediction markets under derivatives law. Consequently, these platforms reframe their products as “trading” — not gambling.

Parlays are associated with gambling.

Calling parlays something else appears designed to place the product inside the language of derivatives law, rather than gambling law. Numerous states and tribal governments have challenged prediction markets in court.

As of early 2026, more than 20 lawsuits and cease-and-desist actions were pending nationwide over prediction markets.

Despite calling the bets something other than a parlay, Polymarket’s filing stated that each contract “may be referred to as a leg.”

How Do Parlays at Prediction Markets Work?

A prediction-market parlay usually works like an “all legs must be true” combo contract.

Instead of buying one YES/NO contract, the user combines several predictions into one position, such as:

• YES: Team A wins
• YES: Player B scores 20+ points
• YES: Team C wins
• YES: Player D has 10+ assists

The combined contract pays only if the required combination happens.

Prediction markets take bets on sports, politics, culture, business, and other real-world events.

Financial Risks of Polymarket Parlays

From a gambling-harm perspective, the risk is obvious.

Parlays may feel inexpensive, exciting, and skill-based, but they represent lucrative products for sports betting platforms.

Some betting apps promote parlays as “trending” wagers to entice users to take long-shot bets.

For people treating these parlay products as entertainment, losses can still add up quickly. For those trying to make money by betting, parlay-style markets may increase the risk of problem gambling.