Professional athletes weren’t concerned about sports betting until it swept the nation. With the NFL sending a plea to federal regulators this week, a new survey of MLB bettors serves as a warning of what could still come for prediction markets.
A survey conducted by The Athletic found that only half of MLB participants expressed their support for the league’s efforts to protect players from collaborating with gamblers. This comes one year after Cleveland Guardians pitchers Emmanuel Clase and Luis Ortiz were suspended for their involvement in a gambling scandal that is still unfolding in court.
MLB players not happy with sports betting?
Operators of prediction markets argue that they are not the same as sportsbooks. They market themselves as a financial instrument for traders who exist in a peer-to-peer system, whereas sportsbooks are gambling by way of their house-made odds.
The Athletic's survey only asked the 100 players who were anonymously polled for their feelings on if the MLB had done enough to protect players from teaming up with gamblers, thereby protecting the integrity of its games. 55 said yes, 27 did not have an opinion or weren’t sure, and 18 said no.
“It’s the first rule: Rule 21,” a multi-time All-Star who believed the league had done its fair share said. “No betting on baseball.”
An NL pitcher pointed to the situation with Clase and Ortiz as a real-life example of the league’s enforcement.
“The whole deal in Cleveland seems like a pretty good start,” said an NL pitcher. “They got rid of one of the better players in baseball, which tells you, ‘We don’t allow this for anybody.’”
However, not all were convinced. One NL hitter argued that the league’s contradictory approach to gambling diluted its efforts to preserve the integrity of its games.
“I think it’s a pretty hypocritical thing to take the stance they do on gambling and put such a negative stigma around players gambling… while also promoting DraftKings and FanDuel Sportsbook and those things,” they said. “It doesn’t make a whole lot of sense to me.”
Prediction markets join MLB, sports landscape
Most major professional sports teams and stadiums have gambling sponsors with companies such as FanDuel, DraftKings, and BetMGM, among others. But not many have deals with prediction markets or their operators.
The Los Angeles Lakers, Los Angeles Sparks, and Los Angeles Kings’ residency at Crypto.com Arena inherently ties them to prediction markets. Crypto.com launched its dedicated prediction market platform OG in February.
Several other teams in the NBA, MLB, and NHL have partnerships with various prediction companies. Leagues themselves have also reached partnerships, with the growing list now including:
- MLB: Polymarket
- NHL: Polymarket and Kalshi
- MLS: Polymarket
As prediction markets continue to grow, the NFL wants officials at the Commodity Futures Trading Commission (CFTC) to define stricter regulations for licensed operators. A letter to the Commission’s Chairman, Michael S. Selig, obtained this week by The Closing Line showed that “The NFL’s highest priority is preserving the integrity of our games.”
The letter also said that the CFTC’s proposed rule set was an improvement from a previous proposal, but also said that it fell “significantly short” of protecting NFL games, players, and prediction market traders.
The league’s gripes could be boiled down into several key pillars, namely the need for stronger anti-insider trading rules and restrictions on easily-manipulable markets. Both of those will be put to the test during the upcoming NFL season, which is expected to produce close to $40 billion in trades.
The Trade Handle Prediction Markets Take
The term “problem gambling” encompasses nefarious activities, gambling addictions, and other undesirable behaviors. Prediction markets don’t have a similarly common term, although they have birthed scandals in various industries. There hasn’t been a major trading scandal in sports, although the upcoming NFL season will be the first when prediction markets were nationally recognized.