Major League Baseball (MLB) is exploring a potential alliance with prediction markets like Polymarket and Kalshi, as announced by Commissioner Rob Manfred on Thursday. This move aims to enhance the league’s ability to oversee betting activities and maintain the integrity of the sport.
During their quarterly meeting last week, MLB owners were informed about the prospects of collaborating with prediction markets, which are governed by federal regulations and stand apart from conventional sports betting practices.
A potential partnership could provide MLB with access to betting data analogous to that from its current sportsbooks relationships, which previously assisted in identifying unusual betting trends linked to two Cleveland Guardians pitchers who are now facing federal charges.
This discussion comes in light of allegations against Guardians closer Emmanuel Clase and starter Luis Ortiz, who are implicated in court documents concerning an alleged pitch-rigging conspiracy. Prosecutors claim that wagers were placed on Clase to intentionally throw a ball on the first pitch of an inning, indicating his involvement span at least 48 games over two seasons, dating back to 2023.
“We believed it was crucial to inform the owners about the differences between prediction markets and traditional sports betting, and why we should contemplate establishing connections with these markets to protect our integrity and secure needed safeguards,” stated Manfred.
“The regulatory framework is notably distinct; sports betting is state-regulated, while the other operates under federal oversight,” he added.
In contrast to state-regulated sports betting, prediction markets are managed federally by the Commodity Futures Trading Commission (CFTC).
Currently, only the National Hockey League and the Ultimate Fighting Championship are the major professional sports organizations collaborating with Polymarket and Kalshi.
However, prediction markets have faced their share of regulatory challenges. Earlier this month, New York Attorney General Letitia James issued a consumer advisory warning that prediction markets could be seen as “unregulated gambling,” suggesting that contracts related to sports might breach state laws and entail significant financial risks for users.
“There’s clearly a potential to collaborate with the markets to secure the kind of integrity protections we desire,” remarked Manfred.
When asked why MLB or its integrity monitoring partners did not detect the purported pitch-rigging activity sooner, Manfred responded: “Sometimes, it requires time for such patterns to become evident.”