Major League Baseball (MLB) dove headfirst into the prediction market business on Thursday, announcing a multi-year deal with Polymarket after signing a memorandum of understanding (MOU) regarding information-sharing with the Commodity Futures Trading Commission (CFTC).
The deal, first reported by Front Office Sports, is for three years and worth between $150 million-300 million to MLB, according to the site. Polymarket will gain exclusive access to MLB licensed logos and branding.
Advertisement
MLB joins the NHL, MLS, and UFC in taking on official prediction market partners. Commissioner Rob Manfred began laying groundwork for a deal with discussions with the players’ union this summer and last month suggested that such partnerships would be a boon for integrity. Polymarket will have access to official league data to resolve markets.
Manfred told ESPN that federal oversight simplified integrity procedures.
“The fact that you have a federal regulatory scheme makes our life a lot easier as opposed to … for example, sports betting, where you’re going state by state,” he said.
Prediction markets: more big-name pals
Prediction markets keep adding high-leverage partners, even as the legality of controversial sports event contracts is litigated in multiple states. The sites assert federal oversight by the CFTC and states deem them unlicensed sports betting. But with CFTC leadership allowing prediction markets to swing for the fences in terms of expansion, and legal resolution perhaps years away, deals are forming and the market keeps growing.
Advertisement
Kalshi is reportedly negotiating a content-integration deal with Fox Corp., after making the same pacts earlier with CNN and CNBC. Massive sportsbook brands like DraftKings and FanDuel have launched prediction market platforms to harness national interest in the upstart mode of sports betting.
Integrity a focus of MLB-CFTC pitch
The MOU with MLB is the first the CFTC has entered with a professional sports league. According to a CFTC release, it “establishes a framework for the CFTC and MLB to discuss, cooperate, and exchange information concerning issues of common interest, including protecting the integrity of professional baseball and the relating prediction markets.”
While the pact is partly designed, according to the release, to “better anticipate emerging trends,” it emphasizes that it will allow “both parties to more swiftly respond to incidents,” at a time when regulatory structure and insider-trading concerns have dogged the prediction market industry. NHL Commissioner Gary Bettman noted after signing deals with Kalshi and Polymarket that fans can be assured league markets on those platforms are “based on real data.”
Advertisement
That said, the first-pitch markets allegedly manipulated by suspended Cleveland pitchers Emmanuel Clase and Luis Ortiz were based on real data, too. But the new information cooperative should, in theory, allow similar episodes to be discovered more easily between MLB and Polymarket.
“The MOU is a collaborative step toward promoting the integrity and resilience of the prediction markets relating to professional baseball. Through this MOU, the CFTC is well-positioned to add additional tools to protect these markets and its participants from fraud, manipulation, and other abuses,” CFTC Chairman Michael Selig said in a release. “I thank MLB and Commissioner Rob Manfred for partnering with the CFTC and taking a leading role in protecting the integrity of these growing markets.”
Read the full article here
