While the NBA is partnering with Kalshi and Polymarket and signing a data-sharing agreement with U.S. regulator CFTC, the NFL argues that the same markets should be subject to state gambling oversight.
According to CoinDesk, through agreements announced on October 26, the NBA chose to work with platforms and regulators on prediction markets based on game outcomes. The league named Kalshi and Polymarket as its preferred platforms and also reached an agreement with the U.S. Commodity Futures Trading Commission (CFTC) to share data.
On these platforms, users can trade contracts based on yes-or-no options concerning the outcome of a game. Scott Kaufman-Ross, the NBA’s head of media distribution and partnerships, said he believes it is important to work with regulators and operators to put appropriate safeguards in place as the sector develops.
Trading ban for league and team employees
According to Kalshi’s announcement, the collaboration covers reporting suspicious trades, sharing data related to market integrity, and working together on investigations. In addition to restrictions on the types of markets that can be offered, league and team employees are explicitly prohibited from trading contracts based on NBA events.
Before the NBA, MLB and NHL had also reached similar agreements with the CFTC. CFTC Chair Mike Selig described the NBA’s move as an effort to protect participants against misconduct such as insider trading and fraud.
Why is the NFL siding with the states?
The NFL supports a different approach to overseeing prediction markets. In a filing with the Supreme Court, the league backed the authority of states under their gambling laws. The NFL argued that CFTC oversight is inadequate and the agency understaffed, and that platforms are not subject to the strict rules enforced by state gambling authorities.
At the center of the dispute is whether these transactions based on sports outcomes fall under federal derivatives market oversight or state gambling regulations. Of three significant federal court rulings on the issue, two have supported the states’ position, and the Supreme Court has been asked to step in to resolve the dispute.
Not investment advice.