NBA joins pro sports leagues on CFTC prediction markets bandwagon while NFL balks

The National Basketball Association has secured a prediction markets agreement with the U.S. derivatives regulator while also penning a partnership with leading firms Kalshi and Polymarket, formally linking professional basketball into the online sports betting movement while another major organization, the National Football League, has rejected such an arrangement.

The NBA, like Major League Baseball and the National Hockey League before it, established a data-sharing memorandum of understanding with the Commodity Futures Trading Commission that oversees federal regulation of exchanges that deal with event contracts — the simple yes-or-no trades behind most sports betting. The NBA's arrangement announced Monday is said to come with constraints meant to maintain the integrity of such wagering.

At the same time, like other leagues, the NBA partnered with the top platforms as their "preferred exchanges."

"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," said Scott Kaufman-Ross, the NBA's head of media distribution and partnerships, in a statement. "These partnerships represent an important step in establishing a framework that creates new opportunities to engage our fans.”

The deals arrive as the prediction markets face a nationwide legal battle with several state governments that contend such betting belongs more appropriately under the power of their gambling laws. Three major federal court decisions have landed on both sides of the issue, with two of them favoring the states' argument. The U.S. Supreme Court has been asked to step in and resolve the dispute, including by the NFL, which sided with the states in a filing with the high court.

The NFL argued that the CFTC's federal oversight has been lax and understaffed, and it said the growing industry's platforms "are not subject to the same rigorous regulatory constructs and oversight provided by state gaming authorities."

Mike Selig, the CFTC chairman who has aggressively sought to bolster the industry on several paths — including legal fights with states, new regulations and these information agreements — called the NBA's decision "a responsible step toward protecting sports integrity and market participants from abuses in prediction markets like insider trading and fraud."

Kalshi said in a Monday posting on its website that the exchange and the NBA will "share integrity data, report suspicious trading, and cooperate on investigations," adding the the arrangement "includes restrictions on permissible markets and explicit prohibitions on league and team personnel trading NBA event contracts, reinforcing our rules against insider trading and manipulation."