Major sports leagues and players' unions in the United States are advocating for the Commodity Futures Trading Commission (CFTC) to implement more stringent regulations on prediction markets related to sports events. They express concerns that these contracts carry similar integrity risks as traditional sports betting, yet currently lack adequate protections.
In a series of public comments submitted to the CFTC regarding the regulation of prediction markets, organizations such as the NBA, MLB, PGA TOUR, ATP Tour, and various players' unions voiced their shared apprehensions. They argue that without enhanced regulations, these markets could be vulnerable to manipulation, insider information leaks, and harassment of athletes.
Many of the submissions also emphasize the need for sports leagues to have a direct role in the creation, approval, and oversight of markets associated with their events.
As the CFTC deliberates on how to regulate these event contracts within a rapidly changing market that increasingly intersects with conventional sports betting, the players' unions have framed the issue as one of safety and labor rights.
A collective statement from the NFLPA, NBPA, MLBPA, NHLPA, and MLSPA highlights the welfare of athletes, noting that the rise of sports betting has already resulted in heightened harassment of players and their families. They warn that unregulated prediction markets could exacerbate these issues.
The unions point out that from a fan's viewpoint, there is little difference between wagering on a traditional sportsbook and engaging in a prediction market, which can lead to similar abusive behaviors.
Key recommendations from the unions include:
- A ban on contracts associated with “negative outcomes,” such as injuries or penalties that a single player can influence.
- Restrictions on markets related to broadcast language or other unconventional contracts.
- Prohibitions on using biometric, health, and performance data.
- Implementation of fan conduct policies with potential bans for abusive behavior.
- Ensuring due-process rights for athletes during integrity investigations and equal access to information shared among leagues, regulators, and market operators.
The unions clarified that they are not contesting the CFTC’s authority over prediction markets but are focused on safeguarding protections if these markets are permitted to function.
The NBA's submission stands out for its detail, advocating for a regulatory framework similar to that of sports betting, including stringent identity verification protocols. The league has raised concerns that some blockchain-based prediction market platforms do not have adequate know-your-customer (KYC) measures, which poses integrity risks.
Additional recommendations from the NBA include:
- Preventing athletes, officials, and team personnel from trading on contracts associated with their leagues.
- Raising the minimum age for participation to 21.
- Real-time reporting of any suspicious or prohibited trades.
- Data-sharing requirements between exchanges and leagues.
- Cross-market surveillance to share information on suspicious activities across platforms.
The NBA also suggests imposing limits or bans on markets that are particularly prone to manipulation, such as player prop markets and contracts related to injuries or officiating. They express concerns about prediction market products that resemble micro-betting or parlay-style contracts, which could further heighten integrity risks. Importantly, the NBA stresses that leagues should have a pivotal role in determining which markets are allowed.
This submission comes as reports indicate that the NBA is advancing discussions with prediction market platforms Kalshi and Polymarket regarding official partnerships.
Meanwhile, the PGA TOUR has highlighted operational and settlement risks associated with the multi-day format of golf tournaments, which could create additional opportunities for manipulation if markets are not properly regulated.