NFL "concerned" about sports "manipulation" via prediction markets
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People watch the 2023 Super Bowl at Caesars Sportsbook at Caesars Palace Hotel & Casino in Las Vegas. Photo: George Rose/Getty Images
The NFL signaled Monday that it's concerned about wagering taking place outside of the framework of regulated sports betting via emergent prediction markets.
Why it matters: Prediction markets like Kalshi and Polymarket are now offering sports event contracts, enabling people to make or lose money on game outcomes, even in states where sports betting hasn't been legalized.
- The prediction markets say they're offering a different product than sportsbooks like DraftKings and FanDuel, while critics say it's tantamount to traditional gambling.
Driving the news: David Highhill, VP of sports betting for the NFL, said Monday the league is concerned that prediction markets don't face the same safeguards as regulated sportsbooks — including integrity monitoring and responsible gambling protections.
- "We're concerned that if these markets aren't properly regulated, they could be susceptible to manipulation or price distortion," Highhill told reporters on a call outlining the league's broader approach to sports betting.
- "So, however this comes to be through the legal channels, I think it's really important that we take advantage of the robust framework that we've put in place via the legalized sports betting process."
State of play: Kalshi is regulated by the Commodity Futures Trading Commission, while Polymarket is pursuing legal U.S. market access after recently acquiring a small firm that obtained a CFTC license.
- Kalshi CEO Tarek Mansour told Axios in an interview in April that the company should not be treated like sportsbooks, which are regulated on a state-by-state basis.
- "I just don't really know what this has to do with gambling," Mansour said. "If we are gambling, then I think you're basically calling the entire financial market gambling."
The other side: Sara Slane, head of corporate development at Kalshi, said in a statement Monday that company has "robust federal oversight of all of our markets" under licensing from the CFTC.
- She added that Kalshi has launched trading features such as deposit limits and self-exclusion designed to ensure integrity of its markets, and that the company has partnered for additional oversight with compliance firm IC360, which provides monitoring services for major sportsbooks.
- "We are committed to working with the NFL and all leagues to address their concerns, share data, and be as transparent as we are legally allowed to be," Slane said.
- Polymarket had no immediate comment.
Inside the room: The NFL has sportsbook partnerships with DraftKings, FanDuel and Caesars, so it has a vested interest in their success — but the league also has a lot to lose if fans lose faith in the integrity of the game due to concerns about the impact of betting.
- Major League Baseball and the National Basketball Association have been bedeviled over the last year by investigations involving suspicious betting patterns.
Zoom in: "What's important about the sports betting markets right now that are legal is that they have robust protections that include information sharing between sports folks in the leagues," Highhill said.
- "There's integrity monitoring requirements. There's prohibitions on certain types of wagers or markets that are more subject to influence. There's the requirements sometimes to use consistent and reliable official league data. And there's also mandatory responsible betting requirements and resources," he added.
The bottom line: "The revolution of prediction markets as a viable competitor to state-regulated sports betting — and as a legal offering in states with no regulated sports betting — is happening at a breakneck pace," gambling industry analyst Dustin Gouker wrote in his newsletter The Closing Line.
Editor's note: This article was updated with a statement from Kalshi.
