The National Basketball Association has signed an agreement with the Commodity Futures Trading Commission (CFTC) to help protect the integrity of games amid concerns over insider trading and manipulation in prediction markets.
Under the memorandum of understanding, the CFTC and NBA will share information and maintain communication about prediction markets and measures designed to safeguard the sport, according to a CFTC statement.
The NBA has also identified Kalshi and Polymarket as its “preferred prediction market exchanges”, the league said.
“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 & partnerships.
“These partnerships represent an important step in establishing a framework that creates new opportunities to engage our fans.”
The NBA is the third sports league to agree a memorandum of understanding with the CFTC. The National Hockey League and Major League Baseball reached similar agreements earlier this year.
The National Football League has not entered into an agreement with the CFTC. Instead, it has called for tougher measures covering game integrity, consumer safety and controls against insider trading.
Dispute over who should regulate prediction markets
The NFL has also taken a different position from the CFTC on whether prediction markets should be regulated by the federal government or by individual states.
The question of who should oversee billions of dollars worth of bets has become a significant point of disagreement. The CFTC has argued that most prediction-market contracts are swaps and therefore fall under its “exclusive jurisdiction”.
States, however, have claimed that prediction-market companies are operating unlawfully, breaching state gaming laws and avoiding tax payments.
The dispute could eventually reach the U.S. Supreme Court after New Jersey asked the court to consider the case. Earlier this month, the NFL submitted an amicus brief to the Supreme Court arguing that sports contracts amount to gambling and should therefore be regulated by the states.
Insider-trading concerns
Insider trading has remained a recurring issue for prediction markets.
An active-duty U.S. Army soldier was charged in April with using confidential information to place bets on Polymarket before the capture of former Venezuelan President Nicolas Maduro earlier this year.
In a separate case, a former White House teleprompter agreed to pay more than $172,000 to settle allegations that he used advance access to President Trump’s speeches to make a profit on Kalshi.
Both Kalshi and Polymarket have said they have introduced measures intended to deter insider trading. These include mandatory employment verification for traders operating in sensitive markets.
