NBA Joins Petition to Regulate Prediction Markets

by Amelia Walker, May 12, 2025

Following the MLB’s petition in March, the NBA has also expressed concerns over the growing popularity of prediction markets. Following recent scandals, it aims to protect the integrity of the sport and has submitted a petition to the CFTC. Check out this article to learn more about these new markets and how they affect the sport.

What are Prediction Markets?

Prediction markets are similar to the prop bets offered by sportsbooks, with a few differences. The markets are presented as a binary choice, usually yes or no, and you choose your answer. You then receive an event contract, similar to a bet slip, and are matched with another person with the opposite opinion. Some of the possible markets include:

• Winner of the Eastern Conference
• Winner of a series
• NBA Champion

While multiple companies offer this service, like Robinhood and Crypto.com, Kalshi is the most popular. It has been authorized by the Commodity Futures Trading Commission (CFTC). The company previously sold event contracts for political events like the US elections, but it has since branched out to sports and pop culture.

NBA’s Concerns

While the NBA is supportive of sports betting, with its commissioner Adam Silver advocating for the repeal of PASPA back in 2014, it believes these markets will harm the integrity of the game. In 2024, Jontay Porter was banned from the league for fixing games to win prop bets. That scandal led to many regulations banning player prop bets.

“Protecting the integrity of NBA basketball and preserving public confidence in our league and in our sport is our highest priority.” – Alexandra Roth, NBA Vice President

Unlike sportsbooks, companies like Kalshi don’t need the approval of a gambling regulation authority to offer these markets. They can be self-certified and provided immediately, with the CFTC having the ability to request their removal if they do not comply. The NBA is concerned that these markets may not meet the necessary regulations.

Kalshi’s Lawsuits

This isn’t the first time regulators have targeted Kalshi for the way it operates. In October 2024, it won a court case against the CFTC after concerns that its event contracts would harm elections. Kalshi proved that its event contracts weren’t gambling, as there wasn’t speculation on a game, and its markets have never led to misinformation.

“The CFTC is our regulator. If the CFTC tells us to stop, we will absolutely stop. If they don’t, then we won’t.” – Tarek Mansour, Kalshi founder

Since then, Kalshi has expanded to offer sports contracts and has received cease-and-desists from Nevada, New Jersey, and Maryland. It has won preliminary injunctions in New Jersey and Nevada, allowing it to operate in the states. The Commodity Exchange Act does not explicitly ban sports event contracts and state legislation does not override it.

Concerns About Oversight

Another issue is the potential lack of oversight. Since the leagues can’t monitor betting activities, they rely on analyst companies that flag any suspicious behavior and report it to regulators or the leagues. One of these companies is IC360, which was responsible for catching Jontay Porter’s bets. IC360 works with many leagues, such as the National Hotrod Racing Association, so it helps many different sports.

“IC360 strongly believes that integrity in sport can be achieved through innovative technology-driven solutions and collaborative stakeholder engagement” – Scott Sadin, Co-CEO of Kalshi

However, IC360 has recently announced it will be partnering with Kalshi. Kalshi claims this will help them monitor suspicious activity, ensure responsible gambling, and report any issues to the relevant authorities. However, the NBA is concerned that this will make it harder to monitor prediction markets and confirm they follow the law effectively.

Future of Prediction Markets

While prediction markets used to offer predictions for entire seasons, they have recently expanded to single-game markets like the winner of a match. These have proven very popular, even more than their political markets, so they may soon add play props. That’s why the NBA and other organizations like state regulators will continue to push for better laws regarding these companies.