The National Basketball Association (NBA) has submitted a letter to Caroline D. Pham, the acting chair of the Commodity Futures Trading Commission (CFTC), specifically discussing the expansion of sports prediction markets.
The letter outlines the potential risks to the fairness of NBA games, as these markets develop rapidly through self-certification processes without sufficient regulatory oversight.
The NBA prediction markets have shifted from full-season betting to single-game betting. This has sparked discussions that more niche markets (such as those focusing on player performance or referee decisions) may soon emerge.
The NBA points out that without appropriate regulatory measures, the integrity of the games could be threatened as these markets continue to grow.
While legal sports betting in some states is subject to specific regulations, sports prediction markets are largely unregulated by such frameworks. Traditional sports betting requires approval from state regulatory bodies to launch new markets, whereas prediction markets are established through self-certification, thus placing the responsibility of addressing integrity issues on the CFTC.
The NBA has emphasized the risks associated with sports prediction markets that lack sufficient regulation.
The lack of regulation for sports events means that exchanges or brokers are not required to report suspicious activities or cooperate with the league in investigations.
The NBA notes that as these markets become increasingly popular, this regulatory gap makes it difficult to monitor risks and address potential issues.
The NBA has requested further discussions on specific measures to reduce integrity risks.
