Major League Baseball has taken a significant step into the burgeoning world of prediction markets by announcing an official partnership with Polymarket. Concurrently, the league has formalised an integrity agreement with the federal commission overseeing these markets, aiming to proactively address potential risks.
Formal Collaboration with Regulatory Authorities
In a statement released on Thursday, MLB confirmed it has entered into a memorandum of understanding with Michael S. Selig, the chair of the Commodity Futures Trading Commission (CFTC). This agreement is designed to "further protect the integrity of baseball by ensuring swift response to incidents and anticipating emerging trends more strongly."
The move comes amid growing concerns from sports leagues regarding prediction markets, which operate alongside legal sports gambling. While traditional sportsbooks adhere to state regulations, prediction markets argue their event contracts are derivative markets, placing them under the CFTC's jurisdiction. MLB had previously advocated for robust integrity protections in a letter to the commission one year ago.
Proactive Measures and Exclusive Access
"The new agreements that we formed with Polymarket and the CFTC are imperative steps in proactively managing the new and rapidly growing prediction market space," stated MLB Commissioner Rob Manfred. "Protecting the integrity of the game on the field is our top priority. By engaging in this community, we are able to work together to create clear boundaries with the goal of mitigating risk while providing fan engagement opportunities."
As part of the partnership, Polymarket and its brokers will gain exclusive access to MLB logos for use within its prediction market products. Additionally, Polymarket will receive official league data from Sportradar, MLB's exclusive global distributor of data for prediction markets.
Information Sharing and Confidentiality
The memorandum between MLB and the CFTC establishes a framework for sharing information related to the integrity of professional baseball and associated prediction markets. All shared information will be treated confidentially, with designated representatives from both organisations meeting regularly to discuss developments.
"We've committed to work together to protect the integrity and resilience of prediction markets relating to professional baseball," Selig commented on X. "Through this partnership, the @CFTC is well-positioned to add additional tools to protect our markets from fraud, manipulation, and other abuses. Thanks to @MLB and Commissioner Manfred for working with us to protect the integrity of these growing markets."
Expanding Integrity Requirements
Despite establishing this exclusive partnership with Polymarket, MLB emphasised its desire to maintain integrity relationships with all other prediction market exchanges offering baseball contracts. These exchanges will be required to integrate necessary integrity protections into their individual rulebooks to ensure consistent standards across the industry.
Industry Context and Growth
The rapid expansion of sports offerings on prediction markets presents leagues with new revenue opportunities while simultaneously raising regulatory concerns. Prediction markets allow participants to trade or wager on the outcomes of future events through simple yes-no contracts.
This development follows similar moves by other major sports organisations. The National Hockey League announced multiyear partnership agreements with Polymarket and Kalshi in October, while Major League Soccer partnered with Polymarket on January 26. Notably, NBA star Giannis Antetokounmpo of the Milwaukee Bucks revealed last month that he has become a shareholder in Kalshi, another prominent prediction markets platform.
MLB's engagement with prediction markets was further highlighted during a presentation at its owners' meetings in Florida last month, underscoring the league's strategic focus on this evolving sector.
