Because of integrity concerns over quickly-rising prediction markets, the NBA has asked the Commodity Futures Trading Commission (CFTC) to provide a regulatory framework for platforms that offer sport-event contracts.
Key Takeaways
- The NBA sent a letter to the federal commission on May 1
- The pro basketball league is concerned about the monitoring of single-game markets and future prop markets
- The Jontay Porter scandal came to light with the help of the legal and regulated sports betting industry
In a letter dated May 1, 2025, the pro basketball league argued its case against platforms like Kalshi giving users the ability to purchase contracts, which act like bets, on individual games and futures markets in all 50 U.S. states. Sports betting is operating legally in 38 states.
“The NBA's support for legalized sports betting has long been underwritten by our view that sports betting is made safer – both for our fans and for our league – when it is legal and subject to robust, sports-specific regulation,” the NBA wrote in the letter to the CFTC.
“In contrast to the many states that have dedicated sports betting regulatory personnel, there is no CFTC division dedicated to overarching, sports-specific oversight of these new betting markets."
“If the CFTC does ultimately decide to permit the continued offering of sports event contracts, we encourage it to close this gap and to adopt a comprehensive regulatory and oversight framework analogous to those governing state sports betting markets, and to impose meaningful limitations on the continued expansion, via self-certification, of these markets into ever more exotic and narrow event propositions.”
The league also requested a chance to discuss prediction market regulation with the CFTC if the platforms are allowed to continue offering sports-related events.
Integrity of the league
The NBA has long supported legal sports betting, which is governed and regulated at the state, not federal, level. A year ago, the league was rocked by a betting scandal involving former Toronto Raptors center Jontay Porter, which led to a lifetime ban from the NBA and federal charges against Porter and other co-conspirators.
A legal sports betting market watchdog and operators uncovered the scandal following suspicious betting activity, so the NBA argues that integrity is paramount for the league. Prediction markets are not licensed and regulated at the state level. The NBA said it is not aware of any entity monitoring sports prediction markets for irregularities.
“Without oversight and regulation tailored to the specific circumstances of sports wagering, the integrity risks posed by sports prediction markets are more significant and more difficult to manage than those presented by legal, regulated sports gambling,” the NBA said in the letter.
“While exchanges and brokers operate under the general auspices of the CFTC, that broad-based financial oversight does not include the kind of sports-specific controls and protections that are the hallmark of state sports gambling regulations.”
‘Exotic’ market concerns
The NBA argues that the prediction platforms can launch “more exotic” markets that go unchecked by regulators, while sports betting operators are required to have state agency approval before allowing new types of wagers.
The Porter scandal involved prop betting, and the NBA fears that prediction market platforms will begin offering individual player contracts soon. The NBA also voiced concerns about markets that could involve injuries, officiating decisions, and league rules.
“This rapid expansion of sports prediction markets has occurred in the absence of the kind of robust, sports-specific regulatory framework that would aim to protect the integrity of the games being played,” the NBA said.
Platforms under fire
The NBA’s letter comes less than a week after Sporttrade, a legal sports betting prediction market, asked the CFTC to allow the operator to offer its platform nationwide, citing a “competitive disadvantage” because of Kalshi, Robinshood, and Crypto.com.
Kalshi burst onto the scene last fall during the 2024 Presidential Election and began offering sports markets during Super Bowl LIX. That evolved into college basketball’s March Madness and now into the NBA playoffs and MLB regular-season games.
Popular trading app Robinhood, through a partnership with Kalshi, is also offering sports contracts. Crypto.com entered the prediction market in late 2024.
Several states have taken action against those three platforms because they are not licensed sports betting operators. Kalshi has filed lawsuits against some of the states, claiming its markets are federally regulated and not subject to the laws and rules of state agencies.
So far, Kalshi has won legal battles to continue operating.
