NBA Signs CFTC Prediction Market MOU, Names Kalshi and Polymarket
The NBA signed an information-sharing MOU with the CFTC to guard against insider trading in prediction markets and named Kalshi and Polymarket its preferred exchanges, joining the NHL and MLB while the NFL backs state oversight at the Supreme Court.
A third major U.S. sports league has placed its prediction market integrity arrangements under the federal derivatives regulator. The NBA announced Monday a memorandum of understanding with the Commodity Futures Trading Commission. The agreement commits the league to share information with the agency and guard against insider trading and manipulation in markets tied to its games. The league also named Kalshi and Polymarket its "preferred prediction market exchanges."
The NHL and MLB signed similar MOUs with the CFTC earlier this year.
According to the NBA's release, the framework includes "limitations on permissible markets, affirmative prohibitions on trading NBA event contracts by league and team personnel, and information-sharing obligations relating to investigations and suspicious trading." The CFTC confirmed the MOU in its own press release.
"As this category develops, we believe it is important to work constructively with regulators and operators to help ensure that appropriate safeguards are in place"
Scott Kaufman-Ross, NBA head of media distribution & partnerships
The arrangement has a commercial side. Kalshi and Polymarket receive rights to use NBA intellectual property, marketing rights and promotional materials on U.S. media channels, along with league data to operate and settle authorized markets. Kalshi said on its website that it and the NBA will "share integrity data, report suspicious trading, and cooperate on investigations."
CFTC Chair Michael Selig framed the agreement as a protection for market participants.
"The NBA joins the MLB and NHL in taking a responsible step toward protecting sports integrity and market participants from abuses in prediction markets like insider trading and fraud"
Michael Selig, CFTC Chair
The NFL holds out
The NFL has not signed with the agency and has instead pressed it for tougher rules. Earlier this month, the league filed an amicus brief at the U.S. Supreme Court arguing that sports contracts are gambling and should be overseen by states. Prediction market platforms, the NFL said, "are not subject to the same rigorous regulatory constructs and oversight provided by state gaming authorities." The league has also described CFTC oversight as lax and understaffed.
A contested legal footing
The CFTC maintains that most prediction market contracts are swaps under its exclusive jurisdiction. States counter that the platforms violate their gaming laws and avoid taxes, and New Jersey has asked the Supreme Court to take up the question. Three major federal court decisions have split on the issue, two of them favoring the states. Last week, Utah sued Kalshi over alleged illegal online gambling, likening the service to sports betting.
The integrity concerns are not hypothetical. An active-duty Army soldier was charged in April over Polymarket bets tied to the Maduro capture, and a former White House teleprompter agreed to pay more than $172,000 over Kalshi trades. The Pentagon recently barred personnel from trading on nonpublic information on such platforms. Kalshi and Polymarket say they have taken steps including mandatory employment verification for traders in sensitive markets.
What it means
For the platforms, the NBA deal adds league data and branding to a growing set of integrity arrangements built around the federal regulator, supporting their argument that a CFTC-centered regime can police sports contracts. The NFL's refusal and the pending state challenges show that argument is far from settled. New Jersey's request to the Supreme Court remains the open question hanging over the sector's legal footing.
