NBA Chair expresses concern to the CFTC around prediction markets
The National Basketball Association has submitted its official position on sports prediction markets.
Key Points
- The NBA has written a direct letter to the CFTC to express concerns around sports events prediction markets
- The letter underlines potential match fixing apprehension, highlighting several issues posed by the unregulated nature of these markets
- NBA Chair Caroline Phem has requested that the CFTC form a dedicated department to oversee these new betting markets
National Basketball Association (NBA) Chair Caroline Pham has filed an official letter to the Commodity and Futures Trading Commission (CFTC), expressing concern around the lack of regulatory safeguards pertaining to sports events prediction markets.
Indeed, this detailed letter covers a vast array of topics. However, it broadly seeks to raise concerns around the unregulated and potentially damaging nature of sports events prediction markets – with a view to both player protection and match integrity.
More specifically, Pham has specified that the proliferation of single-game markets – as opposed to some previously offered full-season events markets – has been allowed to occur without any kind of robust regulatory safeguards in place. Further, the self-certified nature of these markets, which remain unregulated in any sports wagering capacity, has sparked apprehension from the NBA regarding match fixing and game integrity.
As specified in Pham’s letter, the NBA has sought to underline the vast difference between traditional sports wagering and sports events prediction markets – citing how the ‘exotic’ nature of the self-certified events markets could inhibit the CFTC’s ability to impose any post-launch review on them, enabling markets to remain unchecked. Of course, this system is vastly different to the highly regulated nature of the traditional sports wagering space.
Conclusively, the associated has recommended that, should the CFTC decide to allow these sports events prediction markets to continue in their vast and rapid proliferation, it should dedicate a specific division, “dedicated to overarching, sports-specific oversight of these new betting markets.”
Good to know: Last week, the CFTC announced it would be cancelling its previously scheduled roundtable on sports prediction markets
Since the New Jersey Department of Gaming Enforcement (NJDGE) filed a cease-and-desist letter to prediction market operator Kalshi at the end of March for offering sports events contracts, the legal and regulatory contention around the markets has become a flash point in the industry. Numerous states have filed cease-and-desist orders to Kalshi, with the company succeeding in obtaining preliminary injunctions in some cases.
Most recently, earlier this week, the Michigan Gaming Control Board (MGCB) also raised concerns via a letter addressed to the CFTC around sports betting events contracts being offered in the state – with the pressure now mounting on the commission to provide a regulatory roadmap for both operators and regulators to follow.
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