NBA Warns CFTC of Sports Event Prediction Markets Integrity Risks

The NBA is the latest entity to complain to the Commodity Futures Trading Commission (CFTC) about sports event prediction markets. 

The league sent a letter to the CFTC asking for greater oversight of platforms like Kalshi, which let users buy and sell contracts for real-world events.

Unlike traditional sports betting, which is regulated state-by-state, prediction markets such as Kalshi are available in all 50 states. Because these platforms are not bound to the same regulations, they lack anti-money laundering enforcement and other safeguards.    

“Without oversight and regulation tailored to the specific circumstances of sports wagering, the integrity risk posed by sports prediction markets are more significant and more difficult to manage than those presented by legal, regulated sports gambling,” wrote Alexandra Roth, the NBA’s vice president and assistant general counsel for league governance and policy.

“While exchanges and brokers operate under the general auspices of the CFTC, that broad-based financial oversight does not include the kind of sports-specific controls and protections that are the hallmark of state sports gambling regulations,” she continued.  

States Challenge the Legitimacy of Prediction Markets

Several states have issued cease-and-desist orders to companies offering prediction markets, prompting Kalshi to file countersuits. This led to the company winning preliminary injunctions in New Jersey and Nevada.

The CFTC had planned to hold a roundtable last month to address the issue, but it was cancelled and has yet to be rescheduled. 

Roth stated that if sports-event contracts are allowed to continue, the CFTC must create a regulatory and oversight system analogous to what’s in place for state-regulated sports betting. She also stressed the importance of “continued expansion” as markets evolve and increase visibility and popularity.

“The NBA’s support for legalized sports betting has long been underwritten by our view that sports betting is made safer — both for our fans and for our fans and our league — when it is legal and subject to robust, sports-specific regulation,” Roth wrote. “In contrast to the many states that have dedicated sports betting regulatory personnel, there is no CFTC division dedicated to overarching, sports-specific oversight of these new betting markets.”

The CFTC has also recently dropped its appeal against Kalshi, effectively green-lighting its ability to offer nationwide election markets. 

Maintaining Integrity a Priority

Roth raised particular concern over player proposition markets, citing integrity issues.

In April 2024, the NBA banned Toronto Raptors forward Jontay Porter for life for violating the league’s gambling rules. An investigation found at least one instance where Porter removed himself from a game, claiming illness, so his proposition bet would hit.

Another player, guard Terry Rozier, is also under investigation for possible ties to alleged illegal betting activities during a 2023 game.

Roth didn’t cite either player in her letter but emphasized that without proper safeguards, “leagues have little ability to monitor and understand integrity risks and issues if and when they arise.”

She added: “And as sports prediction markets become more popular, and more money flows through these channels — which exist outside of existing sports betting regulatory structures — we anticipate that the risks arising from this limited visibility will grow.”

MLB and NBA Share Similar Concerns With CFTC

The NBA is not the first major professional sports league to take a stand against sports prediction markets.

Major League Baseball sent a letter to the CFTC last month to share similar concerns.

“MLB has supported legal sports betting at the state level based on robust regulation and relationships in which sports leagues are viewed as partners and integrity of competition is considered paramount,” MLB Executive Vice President of Legal and Operations Bryan Seeley said. “If the CFTC decides to permit sports event contracts, this same integrity framework should be applied.”

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 The NBA is the latest entity to complain to the Commodity Futures Trading Commission (CFTC) about sports event prediction markets.  The league sent a letter to the CFTC asking for greater oversight of platforms like Kalshi, which let users buy and sell contracts for real-world events. Unlike traditional sports betting, which is regulated state-by-state, prediction
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