NBA becomes third league to sign CFTC prediction market pact, taps Kalshi and Polymarket

The Commodity Futures Trading Commission and the National Basketball Association have agreed to put in place standards to protect the integrity of the game amid concerns of insider trading and manipulation in prediction markets.

The CFTC and NBA signed a memorandum of understanding to share information and open lines of communication about maintaining prediction markets while preserving integrity, according to a statement from the CFTC. Both Kalshi and Polymarket will be the league's "preferred prediction market exchanges," the NBA said in a statement.

"As this category develops, we believe it is important to work constructively with regulators and operators to help ensure that appropriate safeguards are in place," said Scott Kaufman-Ross, NBA head of media distribution & partnerships, in a statement. "These partnerships represent an important step in establishing a framework that creates new opportunities to engage our fans."

The NBA marks the third sports league to sign an MOU with the CFTC. Earlier this year, the National Hockey League and Major League Baseball signed similar agreements. The National Football League has not teamed up with the CFTC and has pressed the agency for tougher rules on game integrity, consumer safety and insider trading controls.

The NFL has also diverged from the CFTC over when the federal or state government should regulate prediction markets. Who should regulate those billions of dollars worth of bets has become a major point of contention. The CFTC has said that most contracts on prediction markets are swaps and so fall under its "exclusive jurisdiction." However, states have argued that prediction market companies are operating illegally, violating their gaming laws and avoiding paying taxes.

The fight could potentially make its way up to the U.S. Supreme Court after New Jersey asked the high court to take up the issue. Earlier this month, the NFL filed an amicus brief with the U.S. Supreme Court and said that sports contracts are gambling, so they should be overseen by states.

Insider trading has also been a repeated issue in prediction markets. An active-duty U.S. Army soldier was charged in April for using confidential information to place bets on Polymarket ahead of former Venezuelan President Nicolás Maduro's capture earlier this year. In another case, a former White House teleprompter agreed to pay more than $172,000 to settle charges that he used his advance access to President Trump's speeches to profit on Kalshi.

Kalshi and Polymarket have both said they have taken certain steps, including mandatory employment verification for traders in sensitive markets to deter insider trading.