MLB Asks CFTC To Create ‘Integrity Framework’ For Prediction Markets

Major League Baseball, perhaps hedging its position regarding the eventuality of trading on its product becoming being a widespread part of prediction markets, asked the Commodity Futures Trading Commission (CFTC) to create an “integrity framework” similar to those in place with states that authorize legalized sports betting.

The Closing Line substack was first to report MLB sent letter via e-mail to the CFTC noting that the “limited MLB event contracts available today do not carry the same integrity risks as prop bets even single-game bets, but we expect that equivalent offerings will arrive soon.”

To that end, MLB wants that integrity framework in a manner consistent in which it supports “legal sports betting at the state level based on robust regulation and relationships in which sports leagues are viewed as partners and integrity of competition is considered paramount.”

Watching and waiting on Kalshi

MLB’s request of the CFTC comes at a time when Kalshi continues to propel the news cycle as both a burgeoning prediction market for sports betting exchanges, and in the cross-hairs for state regulatory agencies where legalized sports betting is conducted and is in some ways, threatened.

Last month, Kalshi self-certified paperwork with the CFTC for the equivalent of outcomes on single games. That could loom large with the start of the NCAA Tournaments for both men and women — a wildly popular sports betting event among casual sports fans in addition to regular bettors — less than two weeks away and the start of the MLB season.

Last Wednesday, the Nevada Gaming Control Board issued a cease-and-desist order to Kalshi, declaring that “event-based contracts” on sporting events and election outcomes offered by the exchange are “unlawful in Nevada unless and until approved by the Nevada Gaming Commission.”

At the federal level, U.S. Rep. Dina Titus of Nevada sent CFTC Acting Chairwoman Caroline Pham a letter last month stating that “Event contracts on sporting events bring this relatively new industry directly into conflict with state-regulated gaming operators.”

While Pham has been a proponent of prediction markets, incoming Chair and Kalshi board member Brian Quintenz could aggressively expand those boundaries. Additionally, the son of the president, Donald Trump Jr., is an advisor to Kalshi.

What remains to be seen is if MLB’s letter to the CFTC will potentially carry weight in prediction markets similar to NBA Commissioner Adam Silver’s 2014 op-ed in support of legalized sports betting in the New York Times had in launching the now $475 billion industry across more than three-quarters of the U.S.

As of Monday morning, none of the other professional sports leagues or the NCAA has weighed in via comment submission to the CFTC.