NBA urges CFTC to address integrity risks in expanding sports prediction markets

The National Basketball Association has warned U.S. commodities regulators that the rapid growth of sports prediction markets poses "substantial integrity risks" to professional sports, becoming the second major league after Major League Baseball to weigh in on the contentious issue.

In a letter made public Thursday by the Commodity Futures Trading Commission (CFTC), NBA Vice President and Assistant General Counsel Alexandra Roth called for greater oversight of federally regulated exchanges such as Kalshi, which offer futures contracts based on sports outcomes.

“Protecting the integrity of NBA basketball and preserving public confidence in our league and in our sport is our highest priority,” Roth wrote. “That principle has guided our approach to the rise of legal sports betting in the United States and is guiding our study of the sports betting-like products replicated in sports prediction markets today.”

Kalshi, which successfully challenged the CFTC in court last year over election betting, has since expanded into sports prediction contracts. Several states—including Nevada, New Jersey and Maryland—have issued cease-and-desist orders against such activity, prompting Kalshi to file countersuits and win preliminary injunctions in at least two cases.

Unlike traditional sports betting platforms that require regulatory approval from state authorities before launching new markets, federally regulated exchanges can self-certify contracts and begin offering them immediately. The CFTC may later review or intervene, but there is no mandatory pre-launch approval process.

“Exchanges can launch new, more exotic sports prediction markets via self-certification, which puts the burden of initiating any post-launch review on the CFTC and allows most contract markets to simply proceed unchecked,” Roth wrote.

The NBA expressed particular concern over single-game player proposition markets, citing the 2024 lifetime ban of former Toronto Raptors forward Jontay Porter for intentionally underperforming to benefit bettors. Point guard Terry Rozier is also under federal investigation over suspicious betting activity linked to a 2023 game.

“Player proposition markets (i.e., markets focused on a player’s single-game performance) or other potential markets (e.g., markets focused on officiating decisions, league rules, or player injuries) are not far behind,” Roth said.

The league also criticized the lack of structured oversight and cooperation between exchanges and sports organizations, noting there are no clear obligations to report suspicious trading.

“We are not aware of any requirement that either exchanges or brokers report potentially suspicious trades or trading patterns to an affected league or cooperate with any league-run investigations into such suspicious activity,” Roth wrote. “In the absence of these and other, related controls, leagues have little ability to monitor and understand integrity risks and issues if and when they arise.”

The comments were submitted ahead of a now-cancelled CFTC roundtable on prediction markets, originally scheduled for April 30. The agency has not explained the cancellation, but continues to accept public feedback via its online comment portal.

Kalshi recently partnered with integrity monitoring firm IC360, whose co-CEO Scott Sadin said in a statement the firm’s tools are active and in use. Still, the departure of IC360 founder Matt Holt earlier this year raised questions in the betting industry about the firm's independence, especially given its new collaboration with Kalshi.

“In the event that the CFTC decides to permit the continued offering of these contracts,” Roth added, “we would appreciate an opportunity to further engage with the Commission on specific regulatory provisions that can mitigate the associated integrity risks.”