The NHL and the Commodity Futures Trading Commission (CFTC) on Thursday announced their entry into a memorandum of understanding to protect the integrity of trading markets involving the league.
A memorandum of understanding (MOU) is a formal, non-binding document that details the objectives and responsibilities of at least two parties.
Key Takeaways
- The arrangement mirrors one the CFTC signed with the MLB in March.
- The NHL was the first professional American sports league to partner with prediction platforms.
- NHL data will be shared with the CFTC, which will help watch for insider trading
With the agreement in place, the NHL will work with the CFTC to help regulate prediction markets featuring NHL players, matches, and future events. In return, the CFTC — a federal agency in charge of regulating licensed prediction platforms — will use information and resources provided by the NHL to keep a watchful eye over customers' trades and to crack down on suspicious behavior.
The CFTC and the NHL also appointed representatives who will regularly communicate to collaborate on ideas related to the integrity of markets in hockey and related events. They will also share confidential information and maintain open lines of communication.
Additionally, the NHL has internal protections and integrity partners who help combat nefarious forms of sports betting and prediction trading.
The NHL was an early adopter of prediction platforms. Its deals with Kalshi and Polymarket, which were finalized last October, were the first between a professional American sports league and prediction operators.
“Integrity has always been and remains paramount to the NHL and fundamental to the trust our fans and partners place in our game,” NHL commissioner Gary Bettman said in a statement.
“Our agreement with the CFTC enhances the comprehensive integrity monitoring systems already in place and strengthens our ability to identify, deter, and address potential risks. This MOU reflects a shared commitment to transparency, oversight and protecting the integrity of the game.”
Although the MOU is non-binding, it establishes a deeper connection between the CFTC and one of the most popular sports leagues in America. This comes two months after the MLB signed the first MOU with the CFTC related to prediction market integrity.
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Fighting against insider trading
The rapid growth in the popularity of prediction platforms has raised real concerns about the possibility of insider trading. An infamous example of that came when a U.S. soldier involved in the capture of former Venezuelan president Nicolás Maduro won more than $400,000 on Polymarket by predicting the event would happen shortly before embarking on the mission.
While the NHL already had employees and agencies responsible for identifying possible cases of insider trading, the new collaboration will strengthen its protection against these events.
“I’m proud the CFTC and NHL have officially signed an MOU, furthering the agency’s commitment to improve data sharing between professional sports leagues and the Commission,” said CFTC chairman Michael S. Selig.
“This agreement is another step toward safeguarding the integrity of sports and protecting market participants in prediction markets from insider trading, fraud, and other abuses. I applaud NHL Commissioner Bettman for collaborating with the CFTC and taking a leading role in protecting the integrity of professional hockey in our markets.”
While prediction platforms are experiencing a similar catapult into the mainstream as the sports betting boom that occurred after federal legalization in 2018, they should now be more equipped to identify and stop illicit behavior.
Taking the necessary steps
As NHL partners, Kalshi and Polymarket had already given the trading information access to the league’s data distributor and its betting integrity agency, IC360.
In other prediction market news, a new report from gambling research firm Eilers & Krejcik Gaming estimated that Kalshi generated $1.3 billion in NHL trading volume during the year that ended at the start of May. That represented 2.8% of its American sports trading volume, just behind the MLB (3.2%).
