The US federal regulator of prediction markets has reached a formal information-sharing agreement with Major League Baseball in the Commodity Futures Trading Commission’s first such agreement with a professional sports governing body, according to a statement on Thursday.
The “landmark” collaboration will allow the US derivatives regulator to exchange information with the organization that oversees professional baseball, even as the CFTC is still embroiled in a legal debate with several US state gaming regulators over who should have jurisdiction over betting on sporting events. The new memorandum of understanding will allow the federal agency to better handle protecting the markets and their users against “fraud, manipulation and other abuses,” according to a statement from CFTC Chairman Mike Selig.
“The MOU is a collaborative step toward promoting the integrity and resilience of prediction markets related to professional baseball,” he said.
“Protecting the integrity of the game on the field is our top priority,” MLB Commissioner Rob Manfred said in a statement Thursday. “By participating in this community, we can work together to create clear boundaries to mitigate risk while providing engagement opportunities for fans.
At the same time, popular platform Polymarket announced that MLB had named it the league’s official “exclusive prediction market trading partner.”
Prediction markets, led by companies like Polymarket and Kalshi, have burst into sports, politics and other current events, leaving state and federal regulators trying to address their growing popularity. Although the CFTC had previously resisted the sector’s arrival and challenged some of its activity on legal grounds, the agency’s new leadership established by President Donald Trump embraced the technology.
To that end, Selig has been waging a rhetorical battle with state regulators, arguing that his agency’s authority supersedes the states’ reach over sports betting.
Manfred told ESPN that he considered the jurisdiction of the federal regulator marked the main distinction that distinguishes the activity of prediction markets from state regulations on sports betting.
“The fact that you have a federal regulatory scheme makes our lives a lot easier compared to…take, for example, sports betting, where you go state by state,” he told the news outlet.
The CFTC is making progress in its oversight of the sector despite the lack of regulations, which Selig says are coming. Proposing rules to govern prediction markets, a space that overlaps with his broader crypto agenda, is among the top items on the president’s agenda, he said.
