Four Leagues Sign Deals With Prediction Markets, NFL Takes It to the Supreme Court

The NBA signed agreements with Kalshi, Polymarket and DraftKings on October 26. With this, the league became the fourth North American league to form a commercial tie with prediction markets, following the NHL, MLS and MLB. The NBA was also the third league to sign a memorandum of understanding with the Commodity Futures Trading Commission (CFTC).

The agreements provide for leagues to license their trademarks to exchanges and to share official data used to settle contracts. In the NBA, league and team personnel are prohibited from trading. Exchanges, for their part, are required to share information about investigations and suspicious trading. DraftKings was placed in a lower tier as an authorized operator rather than a preferred exchange.

The NFL took a different route. On October 8, the league filed a brief with the US Supreme Court supporting New Jersey. The state wants sports event contracts to be regulated by states rather than the CFTC. The NFL argues that these contracts should be treated as sports betting rather than derivatives, and it is asking for the issue to be resolved before the NFL season ends.

The legal picture is not yet clear. The Third Circuit ruled in favor of Kalshi, while the Ninth and Sixth Circuits sided with the states. As a result, whether an exchange needs a state license depends on which federal court hears the case. States such as Michigan and Washington have also taken steps to ban sports contracts within their own borders.