Major League Baseball is entering the prediction market space with a pair of deals that commissioner Rob Manfred says are aimed at combating threats to the sport’s integrity.
MLB on Thursday named Polymarket as the league’s official prediction market exchange and announced an information sharing agreement with the Commodity Futures Trading Commission, the federal body that oversees the growing prediction market industry.
Polymarket gains the rights to use MLB marks and logos on its platform as well as official data from Sportradar to help resolve markets, while the league gets more visibility and input on the rules governing the billions of dollars that is expected to be traded on baseball this season.
On Wednesday in Miami, Manfred and CFTC chairman Michael Selig signed a memorandum of understanding centered on the sharing of information confidentially. The two sides will meet regularly to discuss potential threats to integrity posed by specific markets.
“We’re making sure that we have the right guardrails and integrity standards in place, and that’s why we’re partnering with MLB, because we’ve got to get this right,” Selig said.
Prediction markets have exploded in popularity over the past year in the U.S. They allow customers to trade on yes/no propositions including on sports outcomes and, according to Selig, fall under the regulatory jurisdiction of the CFTC. States argue that prediction markets offer sports betting and are prohibited unless licensed. The parties are embroiled in legal battles in multiple states.
Manfred said the biggest difference between prediction markets and traditional sports betting operators is federal oversight instead of the varying state regulatory requirements.
“The fact that you have a federal regulatory scheme makes our life a lot easier as opposed to … take for example, sports betting, where you’re going state by state,” Manfred said.
MLB joins the NHL, MLS and UFC as U.S. sports leagues that have partnerships in the prediction market space. Selig said the CFTC is in communication with other U.S. sports leagues as well.
As part of its partnership, MLB and Polymarket will establish an integrity framework, including restrictions on markets vulnerable to manipulation, such as individual pitches and decisions by managers and umpires.
“I hope that it goes without saying that our primary concern, always first in our minds, is protecting the integrity of the game,” Manfred said. “I think in today’s world, it is really important not to be chasing developments but try to be involved and in front of those developments because our world is so fast moving.”
The MLB announcement comes two days after the attorney general of Arizona filed criminal charges against Kalshi, another leading prediction market, claiming the company is operating an illegal gambling business in the state. The MLB-Polymarket deal includes language that would void the partnership if courts were to rule that prediction markets violate state law, according to a league source.
Polymarket has launched its exchange by invitation only in the U.S. but is moving closer to a full launch that will allow customers to trade on baseball this season, according to a company official.
“Integrity was at the foundation of this deal. It wasn’t something that we figured out after the fact,” Ari Borod, president of sports for Polymarket, told ESPN. “It was at the forefront of the conversations. What we’re trying to build is a category that will be around for years that customers love. I think we recognize that can’t happen if you don’t do it in the right way, and so, we were really excited with how the MLB wanted to work on a framework with us.”
