Last month, LeBron James made headlines by signing a significant deal with Polymarket shortly after his contract with DraftKings ended. As the NBA's all-time leading scorer, James's endorsement adds to the list of notable personalities backing Polymarket, which already includes Eli Manning, Derek Jeter, and Spike Lee. However, another prominent athlete in Philadelphia, Eagles running back Saquon Barkley, has parted ways with the prediction market operator.
In an interview with Front Office Sports earlier this week, Barkley revealed that he had sold his stake in Polymarket following advice from the NFL. Barkley, a three-time Pro Bowler, indicated that he made this decision in light of the NFL's ongoing resistance to proposed regulations from the U.S. Commodity Futures Trading Commission regarding sports event contracts. "I was in it before, but no bueno," he said of his divestment.
While the NFL seems far from establishing a partnership with a prediction market, the NBA has taken steps in a different direction. This week, the NBA announced a Memorandum of Understanding with the CFTC, creating a framework for event contracts while designating Kalshi and Polymarket as preferred partners. The league also secured veto power to reject any contracts it finds objectionable.
In parallel, Kalshi is dealing with legal challenges, facing litigation from more than a dozen states as courts debate the classification of sports event contracts as swaps. Recently, Utah Attorney General Derek Brown escalated the situation by filing a criminal complaint against Kalshi executives Tarek Mansour and Luana Lopes Lara. The complaint, filed on October 29, arises from an undercover agent's trades totaling $114.87 on the platform. Brown's complaint follows a lawsuit from Utah declaring that gambling constitutes a "public nuisance" harming residents. The executives are now facing multiple counts of online gaming promotion along with a count of a pattern of unlawful activity. Kalshi responded, calling the situation a "crazy overreach" and claiming they will fight the charges.
On a separate note, Kalshi recently raised $1 billion in a funding round, now valuing the company at $40 billion, reflecting an impressive 81.8% increase from its $22 billion valuation earlier this year.
Meanwhile, Polymarket experienced a significant security breach that led to the temporary suspension of trading on its offshore exchange. The incident, which occurred on Thursday, resulted in hackers draining $2.73 million from around 737 user accounts over just one hour. A flaw in a third-party service, DebugBear, was cited as the cause of the breach. Polymarket assured affected users on the social media platform X that they would be compensated, stating, "Anyone who has been impacted will be made whole."
Most users affected were retail traders with losses generally under $1,000; however, a few major accounts faced considerable financial hits, with four accounts documented to have lost over $100,000 each. As of Friday afternoon, Polymarket reported that at least 689 affected accounts had been fully refunded and emphasized their cooperation with law enforcement in the ongoing investigation.
