The U.S. federal regulator of prediction markets has entered into a formal information-sharing agreement with Major League Baseball in the Commodity Futures Trading Commission’s first such agreement with a professional sports governing body, according to a statement released Thursday.
The “landmark” collaboration will allow the U.S. derivatives regulator to exchange information with the organization that oversees professional baseball, even though the CFTC is still embroiled in a legal debate with several U.S. state gaming regulators over who should have jurisdiction over betting on sporting events. The new memorandum of understanding will allow the federal agency to better protect markets and their users against “fraud, manipulation and other abuses,” according to a statement from CFTC Chairman Mike Selig.
“The MOU is a collaborative step to promote the integrity and resilience of prediction markets related to professional baseball,” he said.
“Protecting the integrity of the game on the field is our top priority,” MLB Commissioner Rob Manfred said Thursday. “By engaging in this community, we are able to work together to create clear boundaries with the goal of mitigating risk while providing engagement opportunities for fans.
At the same time, popular platform Polymarket announced that MLB had named it the league’s official “exclusive prediction market exchange partner.”
Prediction markets — led by companies such as Polymarket and Kalshi — have burst into sports, politics and other news events, leaving state and federal regulators trying to respond to their growing popularity. Although the CFTC had previously resisted the industry’s entry and challenged some of its activities on legal grounds, the agency’s new leadership installed by President Donald Trump has embraced the technology.
To that end, Selig is waging a rhetorical battle with state regulators, arguing that his agency’s authority trumps states’ reach when it comes to sports gambling.
Manfred told ESPN that he sees the jurisdiction of the federal regulator as marking the main distinction that separates the activity of prediction markets from state regulations on sports gambling.
“The fact that there is a federal regulatory system makes our lives a lot easier, as opposed to… take for example sports betting, where you go state by state,” he told the outlet.
