CFTC, NBA Sign MOU to Oversee Sports Prediction Markets, Prevent Insider Trading
Summary
- The U.S. CFTC and the NBA said they signed an information-sharing MOU aimed at ensuring fairness in sports prediction markets.
- The two sides said they will share information that could affect the integrity of professional basketball games to address insider trading and market oversight issues.
- The CFTC argues that products traded in sports prediction markets qualify as financial products, while some state governments have filed lawsuits saying they should be treated as gambling and regulated under state law.
Forecast Trend Report by Period
The Commodity Futures Trading Commission and the National Basketball Association are stepping up cooperation to safeguard the integrity of sports prediction markets.
Reuters reported on October 26 that the CFTC and the NBA signed a memorandum of understanding to share information related to sports prediction markets. The agreement was signed by CFTC Chairman Michael Selig and NBA Commissioner Adam Silver.
The two sides agreed to share information that could directly affect the integrity of professional basketball games. The move follows concerns over insider trading and market oversight tied to sports betting.
More than 30 people were arrested last year as part of a federal investigation into illegal gambling. The NBA also handed down a lifetime ban in a related case.
The CFTC argues that contracts traded on sports prediction markets qualify as financial products and therefore fall under its authority. Some U.S. states, by contrast, have filed lawsuits arguing that sports prediction markets amount to gambling and should be regulated under state law.
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