MLB partners with Polymarket, makes integrity pact with federal commission on prediction markets

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Major League Baseball is entering an official partnership with Polymarket and has an agreement with the federal commission overseeing prediction markets to collaborate on integrity concerns.

MLB said in a statement Thursday it has a memorandum of understanding with Michael S. Selig, the chair of the Commodity Futures Trading Commission, to “further protect the integrity of baseball by ensuring swift response to incidents and anticipating emerging trends more strongly.”

Prediction markets have raised concerns from sports leagues already working to combat issues around legal sports gambling. While legal sports books must follow regulations set by states, prediction markets have argued their trades — called event contracts — are derivative markets, and thus fall under the CFTC's jurisdiction.

One year ago, MLB sent a letter to the commission calling for strong integrity protections.

“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,” MLB Commissioner Rob Manfred said in a statement. “Protecting the integrity of the game on the field is our top priority. By engaging in this community, we are able to work together to create clear boundaries with the goal of mitigating risk while providing fan engagement opportunities.”

This partnership with Polymarket will give the company and its brokers exclusive access to MLB logos to be used within its prediction market products. Polymarket will also get access to official league data from Sportradar, MLB’s exclusive global distributor of data for prediction markets.

Under terms of the memorandum, MLB and the CFTC agreed to share information regarding the integrity of professional baseball and related prediction markets. Shared information will be treated confidentially. Designated representatives will meet regularly.

“We’ve committed to work together to protect the integrity and resilience of prediction markets relating to professional baseball,” Selig said on X. “Through this partnership, the @CFTC is well-positioned to add additional tools to protect our markets from fraud, manipulation, and other abuses. Thanks to @MLB and Commissioner Manfred for working with us to protect the integrity of these growing markets.”

The American Gaming Association expresssed skepticism over the impact of that agreement.

“A multi-hundred million-dollar partnership or a memorandum of understanding with the CFTC doesn’t make an unlawful business model legitimate," Bill Miller, president and CEO of the American Gaming Association, said in a statement. "State laws and voter-approved frameworks govern sports betting in the U.S. - not federal workarounds. Legal sports betting operates under state and tribal regulation, providing strong consumer protections, transparency, and accountability. Sports betting - by any name - is not under the CFTC’s jurisdiction.”

Although it has established this partnership with Polymarket, MLB said it wants integrity relationships with all other prediction market exchanges offering baseball contracts. Those exchanges will be required to integrate the necessary integrity protections into their individual rulebooks.

The rapid growth of sports offerings on prediction markets has provided leagues with another revenue opportunity while also causing concerns about the regulation of prediction markets.

Prediction markets provide an opportunity to trade — or wager — on the result of future events. Trades are made as simple yes-no wagers

The NHL announced in October it had reached multiyear partnership agreements with Polymarket and Kalshi, another major prediction markets platform. Major League Soccer announced a partnership with Polymarket on Jan. 26. NBA star Giannis Antetokounmpo of the Milwaukee Bucks announced last month that he has become a shareholder in Kalshi.

MLB had a presentation on prediction markets during its owners’ meetings in Florida last month.

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AP MLB: https://apnews.com/hub/mlb