The National Football League (NFL) has alerted U.S. legislators about the swift growth of prediction markets, indicating that it may threaten both game integrity and consumer safeguards. The league is advocating for Congress and federal regulatory bodies to impose restrictions on specific sports-related contracts, as highlighted by ESPN.
In a formal statement submitted to the U.S. House Committee on Agriculture, the NFL outlined its concerns in anticipation of a hearing regarding the supervision of prediction markets by the Commodity Futures Trading Commission (CFTC). This topic arises amidst ongoing legal disputes between state gambling regulators and prediction market operators concerning jurisdiction and oversight.
Currently, prediction markets operate across all 50 states, allowing trades on event outcomes including sports, while traditional sports betting is sanctioned in 39 states plus Washington, D.C., according to the NFL.
“We are notably concerned about the emergence of various sports-related futures contracts at a national level, particularly in areas where sports betting is not yet legalized,” remarked Jeff Miller, the NFL’s executive VP for communications, public affairs, and policy in the testimony.
Miller emphasized that contracts linked to sports prediction markets exist beyond the control of state regulators overseeing sportsbooks, where betting activities are monitored and governed by limits established through collaboration with professional leagues.
“These contracts do not fall under the jurisdiction of state regulatory entities or the protective measures they enforce within the industry,” Miller discussed further.
The NFL also cautioned that the financial influx into prediction markets might exceed that of regulated sportsbooks, amplifying threats to the integrity of games.
Throughout the submission, the league urged Congress and the CFTC to ban specific types of sports-related contracts, pointing out those associated with whether particular officiating or safety-related terms are mentioned during broadcasts.
“In every state-regulated market, betting activities are closely scrutinized by regulators and state legislators, who, along with professional sports leagues, determine which bets and wager levels are permissible,” Miller wrote. “These protective structures are absent in prediction markets.”
“Congress and the CFTC should outlaw these and other forms of questionable bets as essential consumer and integrity protections before legitimizing contracts associated with sports events.”
The Coalition for Prediction Markets, representing various key operators, countered the NFL’s claim, saying that prediction markets are already governed by federal regulations.
“This statement is akin to claiming that the stock market operates without rules,” responded a coalition spokesperson to ESPN. “The CFTC’s guidelines regarding abusive or manipulative trading apply to prediction markets, just as the SEC’s regulations govern the stock market.”
This discussion surfaces as traditional sportsbook operators, like DraftKings, FanDuel, and Fanatics – all NFL collaborators – have announced intentions to establish prediction markets. The NHL and UFC have similarly formed partnerships with prediction market firms.