Major League Baseball signs prediction markets pacts with CFTC, Polymarket

The arrangement between the U.S. derivatives regulator and the professional sports organization is the first of its kind in overseeing sports events contracts.

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What to know:

• The U.S. Commodity Futures Trading Commission signed a memorandum of understanding with Major League Baseball on an information-sharing agreement to aid consumer protections in prediction markets betting.
• At the same time, MLB secured a deal with Polymarket as its exclusive prediction markets partner.
• The arrangements were struck even as state gaming regulators continue to insist that they are the leading authority over sports betting and insist that prediction markets activity falls into that bucket.

The U.S. federal regulator of prediction markets has secured a formal information-sharing arrangement with Major League Baseball in the Commodity Futures Trading Commission's first such deal with a professional sports governing body, according to a Thursday statement.

The "landmark" collaboration will allow the U.S. derivatives regulator to swap information with the organization that oversees professional baseball, even as the CFTC is still immersed in a legal debate with several U.S. state gaming regulators on who should have jurisdiction over bets on sporting events. The new memorandum of understanding will allow the federal agency to get a better handle on shielding the markets and their users from "fraud, manipulation, and other abuses," according to a statement from CFTC Chairman Mike Selig.

"The MOU is a collaborative step towards promoting the integrity and resilience of the prediction markets relating to professional baseball," he said.

“Protecting the integrity of the game on the field is our top priority," MLB Commissioner Rob Manfred said in a Thursday statement. "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.

At the same time, popular platform Polymarket announced that MLB had named it the league's official "exclusive prediction market exchange partner."

The prediction markets — led by such companies as Polymarket and Kalshi — have erupted into sports, politics and other current events, leaving state and federal regulators trying to address their growing popularity. Though the CFTC had previously resisted the sector's arrival and challenged some of its activity on legal grounds, the agency's new management set by President Donald Trump embraced the technology.

To that end, Selig has been waging a rhetorical battle with state regulators, claiming that his agency's authority supersedes the states' reach on sports gambling.

Manfred told ESPN he saw the federal regulator having jurisdiction as marking the chief distinction that sets prediction-markets activity apart from state-based sports gambling regulations.

"The fact that you have a federal regulatory scheme makes our life a lot easier as opposed to ... take for example, sports betting, where you're going state by state," he told the news outlet.

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