The Commodity Futures Trading Commission and the National Basketball Association have signed a memorandum of understanding aimed at protecting the integrity of professional basketball amid rising concerns over insider trading and manipulation in prediction markets. The pact establishes information-sharing channels and opens direct lines of communication between the regulator and the league.
As part of the agreement, the NBA named Kalshi and Polymarket as its "preferred prediction market exchanges." Scott Kaufman-Ross, NBA head of media distribution & partnerships, said the league believes it is important to work constructively with regulators and operators as the category develops. "These partnerships represent an important step in establishing a framework that creates new opportunities to engage our fans," he said.
The NBA is the third major sports league to sign such an MOU with the CFTC, following the National Hockey League and Major League Baseball earlier this year. The National Football League, however, has not joined and has pressed the agency for tougher rules on game integrity, consumer safety, and insider trading controls. The NFL has also argued that sports contracts are gambling and should be overseen by states.
The jurisdictional fight has escalated. States contend prediction market companies are operating illegally, violating gaming laws and avoiding taxes, while the CFTC maintains that most prediction market contracts are swaps under its exclusive jurisdiction. New Jersey has asked the U.S. Supreme Court to take up the issue, and the NFL filed an amicus brief supporting state oversight.
Insider trading has been a repeated issue. An active-duty U.S. Army soldier was charged in April for using confidential information to place bets on Polymarket before former Venezuelan President Nicolás Maduro's capture. A former White House teleprompter agreed to pay more than $172,000 to settle charges that he used advance access to President Trump's speeches to profit on Kalshi. Both Kalshi and Polymarket have said they have implemented safeguards, including mandatory employment verification for traders in sensitive markets.
