The U.S. federal prediction markets regulator has secured a formal information-sharing arrangement with Major League Baseball in the Commodity Futures Trading Commission’s first deal with a professional sports governing body, according to a statement Thursday.
The “landmark” collaboration will allow the U.S. derivatives regulator to share information with the organization that oversees professional baseball, although the CFTC is still mired in a legal debate with several U.S. state gaming regulators over who should have jurisdiction over betting on sporting events. The new memorandum of understanding will allow the federal agency to get a better handle on protecting the markets and their users from “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 resiliency of the prediction markets in the context of 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 engaging with this community, we are able to work together to create clear boundaries with the goal of reducing risk while allowing for fan engagement.
At the same time, popular platform Polymarket announced that MLB had named it the league’s official “exclusive prediction market exchange partner.”
The prediction markets — led by such companies as Polymarket and Kalshi — have broken out into sports, politics and other current events, leaving state and federal regulators scrambling to address their growing popularity. Although the CFTC had previously resisted the sector’s arrival and challenged some of its activities on legal grounds, the agency’s new leadership, installed by President Donald Trump, embraced the technology.
To that end, Selig has waged a rhetorical battle with state regulators, arguing that his agency’s authority supersedes states’ reach over sports betting.
Manfred told ESPN that he saw the federal regulator’s jurisdiction as marking the key distinction that separates activity in predictive markets from state-based sports betting rules.
“The fact that you have a federal regulatory scheme makes our lives a lot easier as opposed to … take sports betting, for example, where you go state by state,” he told the news outlet.
