The National Basketball Association has named Kalshi and Polymarket as its preferred prediction market exchanges and entered into an information-sharing agreement with the US Commodity Futures Trading Commission (CFTC) aimed at protecting the integrity of basketball-related markets.

Under the agreements announced on Monday, Kalshi and Polymarket will gain access to official NBA data supplied by Sportradar, the league's designated data distribution partner, for settling authorized markets — a critical dependency, since event contracts pay out based on real-world outcomes and require an authoritative record of results to resolve. Both platforms also receive the right to use NBA intellectual property and to conduct promotional activities across the United States.

The partnerships embed integrity safeguards: NBA and team personnel are barred from trading NBA event contracts, and the exchanges are required to cooperate with investigations into suspicious trading activity — measures aimed at the insider-trading and fraud risks federal regulators have flagged in prediction markets.

Beyond the two exchanges, the NBA expanded its existing agreement with DraftKings to cover prediction markets and said it expects to announce similar arrangements with other industry operators in the coming weeks.

In a separate announcement, CFTC Chairman Michael S. Selig said the agreement with the NBA would strengthen information sharing to address insider trading and fraud in prediction markets. With the deal, the NBA joins Major League Baseball and the National Hockey League in establishing similar arrangements with the regulator.

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States challenge federal oversight of prediction markets

The NBA's agreements come amid an ongoing legal battle over whether federal commodities rules supersede state gambling laws governing sports prediction markets — a dispute that has produced conflicting court decisions. For the exchanges, the answer determines whether platforms can operate under federal commodities rules nationwide or under state gambling laws that vary by jurisdiction.

In September, the 6th US Circuit Court of Appeals ruled against Kalshi in a case involving Ohio and Tennessee, following a similar decision by the 9th Circuit. An earlier ruling by the 3rd Circuit, however, allowed Kalshi to continue operating in New Jersey while its appeal proceeds.

State enforcement actions have continued as well. On Oct. 20, Utah Attorney General Derek Brown sued Kalshi, alleging that the platform had facilitated illegal betting in the state since 2024. Utah officials are seeking to recover an estimated $30 million to $60 million in profits allegedly earned by Kalshi and other defendants.

The US Supreme Court has been asked to review the New Jersey dispute, with 39 states and Washington, DC, supporting the petition. The National Football League, which has not entered into commercial partnerships with prediction market exchanges, also backed the petition, arguing that certain sports event contracts threaten game integrity because they are susceptible to manipulation. The justices have not yet agreed to hear the case. How that question is resolved will shape the legal footing on which partnerships like the NBA's — and the broader sports prediction market industry — ultimately operate.

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Source: Cointelegraph