Major League Baseball teams' growing interest in prediction markets could be the start of a broader embrace as clubs seek new revenue and engagement opportunities, according to an industry expert.
- The Mets and Yankees have struck prediction market partnerships, and American University professor Matthew Bakowicz expects MLB clubs in Chicago, Los Angeles, and Miami could follow.
- New York’s team deals come amid the state’s legal fight against prediction markets, while California’s tribal gaming interests and Texas’ resistance to gambling expansion could complicate similar partnerships.
- Bakowicz expects prediction markets to survive ongoing legal challenges but ultimately face greater state-level regulation and scrutiny.
Recent prediction market partnerships struck by both the New York Mets and New York Yankees offer the latest examples of MLB’s increasing comfort with a growing industry that overlaps with many fans’ other interests, said American University professor Matthew Bakowicz in an interview with Covers. After deals with two of the sports’ most prominent franchises, Bakowicz said similar moves could soon follow.
“I think Chicago is going to fall next,” said Bakowicz. “The Cubs and the White Sox are going to get involved as well. I think you're going to see L.A. (Dodgers) getting involved. I think you're going to see Miami getting involved.”
Bakowicz, a Management Department faculty member at American University’s Kogod School of Business, previously served as manager of gaming operations at Foxwoods Resort Casino, where he oversaw DraftKings Sportsbook and Racebook operations. He said prediction markets could be particularly attractive because they occupy an unusual intersection of gambling, finance, and entertainment – three areas that already overlap with the demographics professional sports organizations are trying to reach.
“This is another business avenue that they're choosing to pursue,” Bakowicz said, “and then they will see how the legal system works out.”
Next potential partnerships
New York offers a natural testing ground for the convergence.
The involvement of marquee franchises in America’s largest media market gives prediction markets greater visibility and legitimacy with mainstream sports consumers. Bakowicz said the next wave will prioritize other similar markets.
Chicago stands out because of its financial trading history, while Los Angeles combines a large sports market with the center of the U.S. entertainment industry. Miami, a growing U.S. financial center, could be another candidate.
Kalshi has maintained that its federally regulated exchange falls under the Commodity Futures Trading Commission rather than state gaming regulators, placing New York at the center of the broader legal fight over whether federal commodities law preempts state gambling authority. Gov. Kathy Hochul and Attorney General Letitia James sued Kalshi in July, alleging its sports event contracts constitute an illegal, unlicensed gambling operation that bypasses the state's gaming laws, taxes, and consumer protections.
Bakowicz expects the federal- and state-level disputes to change how the products are regulated, rather than eliminate them, furthering motivation for team-specific partnerships.
“Ultimately, I do think prediction markets will be allowed,” Bakowicz said, noting he expects greater scrutiny and state-level involvement than exists under the current hands-off federal structure.
Markets that could be left out
Texas and California remain the two most consequential untapped states for conventional U.S. online sports betting, allowing prediction market operators to reach millions of sports fans regulated sportsbooks cannot serve through their traditional wagering products. DraftKings disclosed this month that around 99% of its prediction market users come from states where the company doesn’t offer its sportsbook, meaning California and Texas almost assuredly make up a sizable portion of that customer base.
But the nation’s two most populated jurisdictions each offer complex realities for such deals.
No California MLB team has announced a prediction market partnership comparable to the Mets or Yankees, but Bakowicz believes that could change as the category expands. He predicted Los Angeles would be among the next markets to see team involvement, even as California’s tribal gaming stakeholders have argued in court these platforms offer illegal gambling.
We’re honored to announce Polymarket has been named an Official Prediction Market Partner of the New York Yankees.
— Polymarket (@Polymarket) August 6, 2026
Polymarket 🤝 Yankees pic.twitter.com/2G6ZAtpNW5
Local tribes spent tens of millions of dollars in a successful effort to defeat a commercial operator-led California sports betting legalization ballot measure in 2022. Tribal stakeholders have said they are gearing up for a potential 2028 legalization push on their terms, with prediction markets now a new potential complicating factor in what is already a delicate balance between the commercial operators and the tribes themselves.
The nation’s other largest prediction market jurisdiction may not embrace markets the same way. Texas lawmakers have long resisted any gambling expansion, and sports betting legalization hopes remain muted heading into the state’s 2027 legislative session.
“I think Texas is going to be very conservative,” Bakowicz said. “I don't see Houston (Astros) or the (Texas) Rangers getting involved.”
Sports partnerships raise the stakes
The potential expansion of team partnerships would add another dimension to a regulatory fight that has already attracted attention from state officials and Congress. Bakowicz said the central question being debated by lawmakers is increasingly straightforward: Should prediction markets be considered gambling?
As all parties await further legal clarification, the pending answer carries significant financial consequences.
Most with negative prediction market views want to define them as gambling so that states can regulate and receive tax revenue from them, Bakowicz said. In the meantime, these platforms can provide MLB and its clubs another commercial opportunity even as their long-term regulatory structure remains unsettled.
“Major League Baseball wants to be first,” Bakowicz said.
