The NBA has officially entered the debate on the regulation of sports prediction markets by submitting a letter to the Commodity Futures Trading Commission (CFTC), following a similar move by Major League Baseball. In the letter, NBA Vice President Alexandra Roth expressed concerns about the integrity risks posed by federally legal prediction markets such as Kalshi, Robinhood, and Crypto.com. These platforms allow trading in futures contracts tied to sports outcomes, which critics argue are a way to bypass state gambling laws, though courts have mostly upheld their legality.
NBA Raises Concerns as Prediction Markets Expand Amid Regulatory Conflicts and Legal Challenges
Kalshi, a prominent prediction market exchange, broadened its offerings following a federal court victory that allowed it to offer election-related betting. The platform has since entered the realm of sports markets, drawing legal pushback from state regulators in Nevada, New Jersey, and Maryland. In response, Kalshi filed countersuits and has so far obtained preliminary injunctions in two of those states. The CFTC had intended to host a roundtable to explore these concerns, but the event lacked clear coordination and was ultimately cancelled, leaving the regulatory situation unresolved.
NBA Sounds Alarm on Prediction Markets, Citing Integrity Risks and Gaps in Federal OversightThe NBA’s involvement is significant, given its early and vocal support for legalized sports betting. Commissioner Adam Silver’s 2014 op-ed in The New York Times argued that legalizing betting would protect consumers and preserve the integrity of sports, referencing past scandals like referee Tim Donaghy’s illegal wagering. Despite embracing betting post-PASPA, the NBA is now warning that unregulated prediction markets could undermine the very integrity it once sought to protect through legalization.
NBA Flags Integrity Risks from Unregulated Prediction Markets and Player Prop Betting
One of the NBA’s key concerns is the regulatory gap between traditional sports betting and prediction markets. Sportsbooks must seek approval from state gaming authorities to launch new bets, while prediction markets can self-certify and launch contracts without prior oversight. This rapid product expansion—evidenced by Kalshi’s increasing focus on single-game outcomes—raises alarms about the lack of initial vetting. Roth warned that markets tied to officiating, injuries, or player performance are likely on the horizon.
The NBA’s anxiety is especially acute around player prop bets. The league’s lifetime ban of Jontay Porter for manipulating in-game performance to benefit bets underscores the risk. Porter’s actions, allegedly tied to gambling debts, led to a federal wire fraud charge. Ongoing investigations, including one involving Terry Rozier, show how susceptible players on the fringe can be to gambling-related manipulation, making the rise of unregulated, fast-moving prediction markets a serious concern.
Prediction markets currently lack formal mechanisms for sharing suspicious activity with sports leagues. The NBA’s letter highlights the absence of requirements for exchanges to cooperate with integrity monitoring or investigations. While companies like Sportradar and IC360 play crucial roles in identifying betting anomalies, Kalshi’s new partnership with IC360, following the quiet exit of its founder, has raised industry eyebrows. Roth concluded that without better oversight and collaboration, the risk to game integrity will continue to escalate.