Major League Baseball inks deals with US regulator, Polymarket

The memorandum of understanding with CFTC Chair Michael Selig comes as many US state authorities are cracking down on sports event contracts on prediction markets.

Major League Baseball (MLB) announced that it had signed an “integrity protection” agreement with the US Commodity Futures Trading Commission (CFTC) as it separately inked a deal with prediction markets platform Polymarket. 

In a Thursday announcement, MLB said that its commissioner, Robert Manfred, signed a memorandum of understanding with CFTC Chair Michael Selig following the league’s request for “strong integrity protections in the rapidly evolving prediction market space.” In a separate deal, the league said it had reached an agreement for predictions market platform Polymarket to be its Official Prediction Market Exchange.

“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,” said Manfred.

In August, MLB sent a memo to players and clubs warning them about prediction markets, reminding them that the league’s gambling rules apply to those platforms. In November, two Cleveland Guardians pitchers were charged with sharing inside information about their play with sports bettors.

The deals were announced amid scrutiny from federal and state lawmakers on prediction markets platforms like Polymarket and Kalshi. In the US Congress, lawmakers have named Polymarket in proposed laws to crack down on bets related to military conflicts, while at the state level, both platforms are facing lawsuits related to betting on sporting events without a license.

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The baseball season kicks off on March 26 with 22 teams playing across the US. As of Thursday, Polymarket has listed several event contracts for the league’s spring training games.

Although prediction markets platforms offer event contracts on a variety of topics such as US politics, weather, and pop culture, authorities in many US states have been challenging companies like Kalshi or Polymarket over sports bets and, in Arizona, election wagering. 

Selig, as the sole commissioner at the CFTC, has been publicly pushing for the agency’s “exclusive jurisdiction” over prediction markets, including through the proposal for a rule that could amend or issue new regulations for overseeing the companies.

“Calling a bet an ‘event contract’ doesn’t make it legal,” said the American Gaming Association in January. “Prediction markets are exploiting regulatory gaps to offer unregulated sports wagers.”

Cointelegraph reached out to Polymarket for comment on potential lawsuits over the deal but had not received a response at the time of publication.

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Source: CoinTelegraph