On Monday, the NBA announced a memorandum of understanding (MOU) with the Commodity Futures Trading Commission (CFTC) and named Kalshi and Polymarket as the league's "Preferred Prediction Market Exchanges." This marks the NBA's entry into the realm of prediction markets, joining other major U.S. sports leagues.
With the NBA having just launched its 82nd season, ensuring integrity within NBA-related contract markets was a top priority for the league. The agreements with Kalshi and Polymarket aim to implement "significant integrity protections." Measures outlined in the deal include restrictions on allowable markets, a ban on trading NBA event contracts by league and team personnel, and obligations for information sharing concerning investigations and suspicious trading, according to the NBA's statement.
As preferred partners, both Kalshi and Polymarket will gain access to NBA intellectual property, marketing rights in the United States, and official data feeds provided by Sportradar, the league's data distribution partner. Additionally, the NBA plans to enhance its existing partnership with DraftKings to encompass prediction markets and nationwide promotions. More announcements regarding expanded agreements with other sports betting partners are anticipated in the upcoming weeks.
These extended partnerships are expected to create additional integrity obligations specific to prediction markets, aligning with the NBA's latest sports betting restrictions, which were introduced prior to the season's commencement.
Scott Kaufman-Ross, the NBA’s head of media distribution and partnerships, highlighted that maintaining the league’s integrity is the organization’s "top priority." He emphasized that forming these prediction market partnerships and establishing the MOU with the CFTC are essential steps in creating opportunities that enhance fan engagement.
The NBA joins a growing number of major U.S. leagues collaborating with prediction market operators. Polymarket has been allied with MLB, UFC, and MLS, while both Kalshi and Polymarket now partner with the NHL as well as the NBA. Notably, Monday was a rare instance known as a "sports equinox," where all four major leagues—NFL, NBA, MLB, and NHL—are in action on the same day.
Before the NBA's announcement, several prominent players had already signed endorsement deals with these platforms. Miami Heat forward Giannis Antetokounmpo announced a deal with Kalshi in February, and LeBron James featured in a Polymarket advertisement this September. As the NBA's all-time leading scorer and now in his 24th season, James is a central figure in the current league landscape.
Kalshi's head of sports partnerships, Adam Barrick, described the NBA partnership as a "significant milestone," affirming the commitment to ensure fair, safe, and open markets. Polymarket's president of sports business development, Ari Borod, echoed this sentiment, stating his team aims to cultivate a "safe, transparent prediction market ecosystem for everyone."
Barrick and Borod both come from backgrounds in the sports betting industry, with Barrick having spent over six years at DraftKings and Borod previously working with FanDuel, Action Network, and Fanatics.
The five-page MOU with the CFTC establishes a working relationship focused mainly on information sharing. It promotes cooperation and the exchange of relevant information but is not legally binding. The document states that any shared information will be at each party's "sole discretion." The relationship is expected to develop through consultations, periodic meetings, and practical arrangements.
CFTC General Counsel Tyle Badgley and NBA Executive Vice President Dan Spillane have been designated as contact points for the agreement. CFTC Chair Michael Selig characterized the MOU as a "responsible step toward protecting sports integrity and market participants from abuses in prediction markets, such as insider trading and fraud." NBA Commissioner Adam Silver did not provide any statements for Monday's release.
Silver has been a strong proponent of legalized sports betting, advocating for it since 2014. However, he has expressed concerns about the complications arising from a fragmented regulatory system across states, particularly regarding issues of information sharing and investigations.
In recent years, the NBA has faced several gambling-related scandals. Toronto Raptors forward Jontay Porter received a lifetime ban for such offenses, and other players, like Terry Rozier and Malik Beasley, are also facing legal challenges. These incidents have prompted the league to restrict certain betting markets this season, such as prohibiting bets on specific tips and scenarios involving limited player participation. The NBA has the authority to impose restrictions on its partners, which extends to the new prediction market agreements.
This summer, during the NBA Summer League in Las Vegas, Silver remarked on the league's limited control over its intellectual property and expressed the need for a federal-level commissioner to streamline integrity efforts. Ironically, the CFTC falls under that federal umbrella, but concerns remain regarding its capacity to effectively oversee prediction markets amidst its larger obligations toward derivatives and swaps.
Matt Rybaltowski contributed to this report.
