NBA Looks to Expand into Prediction Markets with Kalshi, Polymarket Talks

The NBA has said that it is currently in active discussions with prediction market operators Kalshi and Polymarket, joining a growing trend of US sports leagues partnering with the platforms.  

According to Front Office Sports (FOS), the NBA has been talking to Kalshi and Polymarket on an informal basis over the past year, but in recent months, those talks have ramped up since Commodity Futures Trading Commission (CFTC) chairman Michael Selig announced that the CFTC would ensure that sporting integrity would be upheld if leagues partnered with them.  

“It was his engagement that accelerated talks,” a source told FOS. “He signaled he has every intention of putting real regulation in place with proper protections.” 

If the NBA were to partner with either Kalshi or Polymarket, it is believed the league would have some control over which contracts are made available to the public. The prediction market apps would also need to ensure that appropriate mechanisms are in place to prevent and monitor suspicious betting.  

Upholding sporting integrity is an important issue for the NBA. In recent years, the NBA has been riddled with betting scandals. Most recently, in October, NBA players Damon Jones and Terry Rozier were arrested alongside Portland Trail Blazers head coach Chauncey Billups and over 30 others for allegedly taking part in an illegal gambling scheme. 

While talks have since progressed, there still isn’t a clear timeline for when an official partnership will be announced, but sources have told FOS it could happen as early as the next season. If that were the case, the NBA would join the NHL and MLB in partnering with prediction markets.  

Kalshi continues to face legal troubles

While more sports leagues look to partner with prediction markets, some haven’t been free from facing increased scrutiny, especially from state gambling regulators that view sports event contracts as forms of unregulated gambling.  

Recently, Kalshi sued Montana officials, including the state’s Attorney General Knudsen, following a cease-and-desist order issued to the operator, which alleged that the contracts it offered amounted to illegal gambling.  

In return, Kalshi filed the lawsuit, named Kalshi v. Knudsen et al., in a Montana federal court, and the case has since been assigned to US Magistrate Judge John Johnston.  

In the suit, Kalshi argues that, because its contracts are federally regulated by the CFTC, they are not subject to state gambling laws. Continuing its point, Kalshi added that its event contracts are classified as derivatives, distinguishing them from traditional wagering products, as their financial value is instead determined by market activity.  

“Because traders do not take a position against the exchange itself, traders’ ability to hedge risk requires counterparties willing to assume risk in the hope of seeing a return,” the complaint read.