NBA Leadership Warns CFTC Against Sports Prediction Markets

The battle over sports prediction markets has had a powerful new group weigh in.

The National Basketball Association has warned the Commodity Futures Trading Commission (CFTC) over the rise of these controversial markets. The league shared its fear that prediction markets will hurt the integrity of its game and other sports across the US. Their letter follows the lead of the MLB, which had already reached out to the federal regulator.

“Protecting the integrity of NBA basketball and preserving public confidence in our league and our sport is our highest priority,” NBA VP Roth wrote to the CFTC. “That principle has guided our approach to the rise of legal sports betting in the United States and is guiding our study of the sports betting-like products replicated in sports prediction markets today.”

The league’s warning comes as the CFTC is facing mounting pressure to rule on sports prediction markets. The nature of these markets has had sports betting regulators and state lawmakers up in arms, pushing to have them qualified as a form of gambling.

The CFTC had planned to hold a roundtable to discuss sports prediction markets, but abruptly canceled the event without giving a reason.

What Will the CFTC Rule?

New CFTC leadership had originally favored sports prediction markets and even helped Robinhood and Kalshi launch for March Madness. However, that market was quickly met with cease-and-desist letters and investigations, leading them to put it on hold.

Prediction market operator Kalshi has begun fighting back in the courts. A Nevada court gave them a win by ruling that only the CFTC has the right to shut down these operators. That is because these are considered to be trading instead of gambling, which is federally regulated. 

The ruling shows that legal fights likely won’t make much headway, leaving the final decision up to the CFTC.