Major League Baseball (MLB) wants the Commodity Futures Trading Commission (CFTC) to create an “integrity framework” around sporting event contracts as the burgeoning vertical continues to expand.
In a letter dated March 7, MLB EVP of Legal and Operations Bryan Seeley stressed that, “as the resemblance between sports event contracts and traditional sports betting markets continues to grow, so too does the need to replicate the integrity and consumer protections that exist at the state level.”
The executive noted that, while leagues have partnered with sportsbooks, regulators and integrity monitoring firms to track betting activity, he does not know of any stipulation that requires prediction markets such as Kalshi and Crypto.com to notify leagues of potential integrity threats or share data for integrity purposes.
“MLB has been advised that some exchanges and brokers take the position that they are not even permitted to share information with MLB under current CFTC regulations,” added Seeley.
“If the CFTC decides to permit sports event contracts, this same integrity framework should be applied,” he asserted.
MLB’s letter comes days after Nevada Rep. Dina Titus labeled sports event contracts a “backdoor way” to allow sports betting without integrity monitoring or player protection safeguards.
Kalshi looks to expand its sports offerings
As of Monday, Kalshi’s website has three prediction markets available for users to wager on: futures on the respective champions of the American League, the National League and the World Series.
However, the company recently wrote to the CFTC to inform the commission that it intends to greatly expand its offerings by “self-certifying” markets that resemble single-event wagers and prop bets.
“The sports event contracts that exchanges have recently offered resemble sports betting,” Seeley wrote in the MLB letter. “The limited MLB event contracts available today do not carry the same integrity risks as prop bets or even single-game bets, but we expect that equivalent offerings will arrive soon.”
Nevada makes firm move against Kalshi
MLB became the first sports league to insert itself directly into the ongoing conversation around sports event contracts.
The league sent its letter just days after the Nevada Gaming Control Board (NGCB) declared that it had sent a cease-and-desist letter to Kalshi, ordering the company to stop accepting business from Nevada residents by March 14. The board asserted Kalshi’s sports and election markets are “unlawful in Nevada unless and until approved as licensed gaming by the Nevada Gaming Commission.”
A Kalshi spokesperson told SBC Americas that it “has always held the utmost respect for regulators and the regulatory process” and is proud to have “paved the way” for prediction markets to thrive in the U.S.”
Kalshi added in that statement last week that it looks forward to ensuring that Americans continue to have access to “safe, regulated and transparent prediction markets.”
As reported by Dustin Gouker in The Closing Line, CFTC counsel has submitted the Nevada C&D letter as evidence in the commission’s federal court case against Kalshi, which centers on Kalshi’s political markets.
