NBA strikes deals with prediction markets, with eye on integrity and regulations

MIAMI (AP) — The NBA has struck deals that will make Kalshi and Polymarket the league’s preferred prediction markets, along with an agreement with a federal agency tasked with regulating those exchanges.

Those agreements, announced Monday, are intended to provide “significant integrity protections for NBA-related markets,” including limitations on what can be offered on those exchanges, transparency when it comes to suspicious patterns by site users, and banning league and team personnel from making trades related to league events.

The prediction markets will have “information-sharing obligations relating to investigations and suspicious trading,” the NBA said. The NBA has had similar guardrails in place with its sportsbook partners for some time and has cited instances where that system has flagged irregularities in betting patterns.

“If you’re going to be betting on our games or trading on our games or playing fantasy around our games, it’s better for it to be regulated than unregulated,” said Scott Kaufman-Ross, the NBA’s head of media distribution and partnerships. “And clearly, our fans have interest in this activity. So, we’re in a better position to protect the integrity of our games in a regulated market where there’s transparency, where things can be monitored and we have insight into what’s happening.”

The NBA is also expanding its agreements with current official sports betting partners, such as DraftKings, to include their prediction-market offerings. Not all states offer legalized sports betting but predictions markets — at least on some level — are essentially available in all 50 states.

More than a dozen states are involved in litigation over prediction markets and earlier this month the NFL asked the Supreme Court to rule on the regulation of such markets. The U.S. Commodity Futures Trading Commission contends that it has exclusive jurisdiction on oversight, though some states believe it should fall under their purview.

Earlier this month, the NBA told sportsbooks they will not be permitted to offer certain types of wagering this season, including but not limited to which players record the first stat of a game, the outcome of the opening tip and taking the “under” involving players not expected to play more than a few minutes. The deals announced on Monday are expected to have similar restraints.

“A big part of this is a limitation on the types of markets that can be offered,” Kaufman-Ross said. “We will have the right to approve the types of markets that are available on our games, which is a very important component for us. And we’ve had very constructive dialogues with the companies as part of that.”

The NBA’s memorandum of understanding with the CFTC “reflects a shared commitment to ensuring that NBA-related prediction markets are subject to appropriate regulatory oversight and integrity protections,” the league said.

Kalshi and Polymarket, as part of their partnerships with the NBA, will now be able to describe themselves as the “Preferred Prediction Market Exchange of the NBA,” plus have access to league intellectual property such as logos, be able to get NBA statistical data from league partner Sportradar “to operate and settle authorized NBA-related markets,” and other marketing activations.

The terms of the NBA’s agreements with Kalshi and Polymarket were not disclosed, other than the league confirming that they are for multiple years. There are NBA stars with business relationships with those markets; Miami’s Giannis Antetokounmpo has promoted Kalshi and Philadelphia’s LeBron James recently signed a deal with Polymarket. At least one other NBA star, San Antonio’s Victor Wembanyama, recently said he will never endorse such sites.

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