MLB signs agreements with CFTC and Polymarket amid prediction market expansion
A memorandum of understanding signed with CFTC Chair Michael Selig arrives during a period when numerous state-level regulators are pursuing enforcement actions against sports-related contracts on prediction market platforms.
Major League Baseball (MLB) has revealed the signing of an agreement focused on "integrity protection" with the US Commodity Futures Trading Commission (CFTC), while simultaneously finalizing a separate partnership with Polymarket, a leading prediction markets platform.
According to a Thursday statement, MLB disclosed that Commissioner Robert Manfred executed a memorandum of understanding with CFTC Chair Michael Selig, which came after the league sought "strong integrity protections in the rapidly evolving prediction market space." Through a distinct arrangement, the organization announced it had established a partnership designating Polymarket as its Official Prediction Market Exchange.
"The new agreements that we formed with Polymarket and the CFTC are imperative steps in proactively managing the new and rapidly growing prediction market space,"
— Robert Manfred, MLB Commissioner
Last August, MLB distributed a memorandum to both players and team organizations issuing warnings about prediction market platforms, emphasizing that the league's policies regarding gambling extend to these digital venues. Subsequently in November, two pitchers from the Cleveland Guardians faced allegations of providing insider information concerning their performance to individuals engaged in sports betting activities.
These agreements were revealed during a time of heightened examination from lawmakers at both federal and state levels regarding prediction market platforms such as Polymarket and Kalshi. Within the halls of the US Congress, legislators have specifically referenced Polymarket in draft legislation aimed at restricting wagers connected to armed conflicts and military operations, while simultaneously, state-level authorities are pursuing legal action against both platforms for allegedly facilitating sports betting operations without proper licensing authorization.
The commencement of the baseball season is scheduled for March 26 with 22 teams taking the field in games throughout the US. At the time of Thursday's announcement, Polymarket had already published multiple event contracts covering the league's spring training matchups.
Will the CFTC agreement prevent state-level lawsuits over sports bets?
Despite the fact that prediction markets platforms provide event contracts covering a diverse array of subjects including US politics, weather patterns, and popular culture topics, regulatory bodies in numerous US states have been mounting legal challenges against companies such as Kalshi or Polymarket specifically regarding sports betting activities and, in the case of Arizona, wagering on electoral outcomes.
Selig, serving as the sole commissioner currently at the CFTC, has been actively advocating in public forums for the agency's "exclusive jurisdiction" over the prediction markets sector, including through the advancement of a proposed rule that would potentially modify existing regulations or introduce new oversight frameworks for supervising these companies.
"Calling a bet an 'event contract' doesn't make it legal. Prediction markets are exploiting regulatory gaps to offer unregulated sports wagers."
— American Gaming Association (January)
Cointelegraph reached out to Polymarket for comment on potential lawsuits over the deal but had not received a response at the time of publication.