The NHL is making history by being the first U.S. professional sports league to officially enter the prediction market space.
On Wednesday, the NHL announced multiyear partnership agreements with prediction market platforms Polymarket and Kalshi. The deals come at a time when prediction markets face regulatory scrutiny regarding the legality of sports event contracts. As part of the pacts, Kalshi and Polymarket acquired rights to access official NHL data. The two platforms can also use the league’s marks and logos on their platforms.
NHL puts stamp of approval on two major firms, one not even in the US
“Teaming up with the NHL is an important milestone for Kalshi and the industry at large,” said Kalshi CEO Tarek Mansour. “To have a league like the NHL embrace Kalshi is a testament to the integrity, safety and trust with consumers that Kalshi has spent years building during our time pioneering this asset class. It should be clear now—prediction markets are here to stay.”
The partnerships between the NHL and the two prediction market platforms also extend to brokers and merchants. The deals allow Kalshi and Polymarket brokers and merchants to use the NHL’s marks and logos. Kalshi and Polymarket will also have a national marketing presence during NHL game broadcasts. The two platforms will be included in virtual signage aired during regular season and playoff games. The signage will also be displayed during marquee events, including the NHL Winter Classic and Stadium Series.
“As prediction markets continue to evolve at a rapid pace, partnering with the two market leaders, Kalshi and Polymarket, provides a tremendous opportunity for the broadest fan engagement during the NHL season,” said NHL Business President Keith Wachtel. “Polymarket and Kalshi are ideal partners as this category continues to grow and expand.”
NHL embraces prediction markets while other leagues voice concerns
The NHL is entering the prediction market space as other major professional sports leagues voice concerns about sports event contracts.
Earlier this year, the NBA sent a letter to the Commodity Futures Trading Commission (CFTC), expressing concerns over the infancy of event contracts tied to the NBA.
The event contracts, offered by exchanges including Kalshi and Crypto.com, are growing in popularity but the NBA considers legal sports betting to be a better avenue for fan engagement due to state-mandated gambling regulations and standards.
MLB wants clarity regarding sports event contracts.
America’s oldest professional sports league wants to the CFTC to create an “integrity framework” for sports event contracts to offer the same consumer protections required by licensed sportsbooks.
The NFL responded to the growing popularity of prediction markets by prohibiting all players and staff from the platforms to trade on sports event contracts. The NFL took the stance it believes sports event contracts mimic sports betting.
The NFL’s active gambling policy bans league employees from wagering on league games. They are also not allowed to have someone else place bets for them. Players are also banned from wagering at team facilities and participating in DFS contests.
The NBA, MLB and NFL are hesitant about embracing prediction markets despite support from a major sports broadcaster, Fox. Last month, NFL on Fox partnered with Kalshi, providing the prediction market with access to NFL game clips and data.
Polymarket soars to $8 billion valuation
Polymarket is teaming up with the NHL after receiving a fresh injection of capital from Intercontinental Exchange, Inc. (ICE), the parent company of the New York Stock Exchange. ICE is investing up to $2 billion in Polymarket, valuing the prediction market at approximately $8 billion. The transaction also makes ICE a distributor of Polymarket’s event-driven data and a collaborator on blockchain-focused initiatives.
Polymarket received an investment from ICE after announcing plans to reenter the U.S. after exiting the country in 2022 after reaching a $1.4 million settlement with the CFTC. The settlement stemmed from Polymarket’s failure to register as a designated contract market.
Polymarket prepared for its U.S. reentry by acquiring federally registered derivatives exchange QCX and its affiliated clearinghouse in a deal valued at $112 million.
Kalshi now has active suits in seven states
Kalshi reported over $440 million in trading activity during Week 1 of the NFL season.
Kalshi is gaining traction from sports fans but is facing legal and regulatory woes.
Earlier this month, Kalshi sued the Ohio Casino Control Commission and the state’s Attorney General for threatening to prohibit trading of event contracts. As in other cases, Kalshi is seeking an injunction not only to keep its sports contracts online as the case develops but to block potential license revocation of the company’s business partners.
It is the latest in a string of litigation for Kalshi, with active suits challenging sports contracts in California, Maryland, Massachusetts, Nevada, Wisconsin and New Jersey.
DraftKings readies to join prediction market fray
The NHL is embracing prediction markets and their event contracts as DraftKings makes its first official play into the emerging vertical.
Earlier this week, the Boston-based operator announced the acquisition of Railbird Technologies, a derivatives exchange licensed by the CFTC. Railbird and DraftKings plan to launch a new DraftKings Predictions mobile app in the coming months. It will allow users to trade event contracts on finance, culture and entertainment. There are no initial plans to offer sports.
