Sports Leagues and Unions Urge CFTC for More Prediction Market Control
Some of the top sports leagues and players’ unions have urged the Commodity Futures Trading Commission (CFTC) to exercise greater oversight of prediction markets.
The NBA, MLB, PGA Tour, and ATP Tour, as well as players’ unions, have stated they want stronger safeguards for prediction markets. They have voiced their concerns to the CFTC, which regulates the prediction market industry, as they want it to enforce those safeguards.
More prediction market control: safeguards and integrity
The leagues and unions state that event contracts offered by prediction market companies carry the same integrity risks as other vulnerable sports bets but lack the same safeguards.
The concerns arose in the public comment submissions to the CFTC. The leagues have stated that stricter regulation of event contracts is needed to prevent bet manipulation, the use of inside information for bets, and athlete harassment. The submissions also showed the leagues want their own say in what event markets are offered for their sports.
The leagues aren't alone in their fears surrounding prediction markets. Bill Miller, president and CEO of the American Gaming Association, was critical of the CFTC and prediction markets this week.
Players' unions focus on similarities of bets and event contracts
The players' unions for the NFL, MLB, NHL, MLS, and NBA had a joint submission. It argued that event contracts are nearly identical to typical sports bets. Now, with more bets available through event contracts, there has been a rise in harassment not only against players but also against their families.
Among other things, the unions want bans on negative outcomes (injuries, penalties, etc.) and policies on fan conduct. They also seek due-process rights for athletes under investigation for integrity issues.
They're pushing for information sharing with the leagues, the prediction market operator, and the CFTC. The unions made a point in their submission to show that the leagues have no position on the CFTC's authority over prediction markets, but simply want safeguards in place.
What the leagues want
Each league submitted its desired safeguards, and the common goal was to design prediction markets and secure CFTC oversight.
Leagues agree that event contracts carry integrity risks similar to regular sports betting. They are in agreement that the prediction markets:
- Need stricter identity verification
- Should only use league data that is official
- Should ban vulnerable markets or have them closely monitored
- Need stronger protection measures in place for athletes and consumers
- Offer betting products with risks of integrity
The timing
The timing of submissions to the CFTC comes as major leagues are starting to partner with prediction market companies, as they do with regular sportsbook operators.
Last year, the NHL inked a deal with Polymarket and Kalshi, and both prediction market platforms are currently negotiating with the NBA.
Polymarket has already partnered up across the pond with Spain’s top soccer league, La Liga, and one of the top clubs in Italy’s Serie A, Lazio.
The issue of prediction markets has been a hot topic lately, with several states considering bans. Ohio recently introduced a bill that would not ban prediction markets, but would regulate them like typical sports betting.
