Major League Development: CFTC and MLB Agree to Monitor the Integrity of Prediction Markets

By: John Mikuta

In a watershed moment for the prediction market industry, the Commodity Futures Trading Commission (“CFTC”) signed a Memorandum of Understanding (“MOU”) with Major League Baseball (“MLB”) today.  According to the CFTC’s press release, the groundbreaking agreement “establishes a framework for the CFTC and MLB to discuss, cooperate, and exchange information concerning issues of common interest including protecting the integrity of professional baseball and the relating prediction markets.” [1]

The MOU “provides a mechanism for the CFTC and MLB to exchange information,” which will “enable both parties to more swiftly respond to incidents and better anticipate emerging trends.”  The MOU provides that the parties “endeavor to meet as needed, but at least monthly, to identify and discuss issues that may impact the integrity of professional baseball and the event contract markets related thereto.”[2]  The MOU permits the parties to use the information to promote and protect integrity, resilience, vibrancy, and public confidence in the event contracts market and professional baseball.

The announcement comes on the same day that MLB announced a multi-year deal with Polymarket to make it the exclusive prediction-market platform of MLB.[3]  In February, MLB Commissioner Rob Manfred said that MLB “might want to consider being in business with prediction markets in an effort to protect our integrity, to get the kind of protections we need.”[4]

MLB’s agreement with Polymarket includes promises to restrict markets that the league views as integrity risks, including “individual pitch results and umpire and manager decisions.” [5] Further, late last season, MLB circulated a memo firmly instructing players not to participate in prediction markets or risk money on any outcome related to baseball games or events.[6]

CFTC Chairman Michael Selig commented, “We need to understand and work together with the leagues to know what can potentially be easily manipulated on the field.” [7] Selig noted that the CFTC doesn’t “necessarily have all that information from our background as a derivatives regulator” but is “going to get it by working together with the league and getting this right.” [8]

The first-of-its-kind MOU between the CFTC and MLB is another example of the CFTC’s increasing oversight over trading activities on its regulated exchanges.  Last week, the CFTC issued a prediction markets advisory, which sought “to encourage growth and innovation in these markets while reminding designated contract markets of their regulatory obligations.” [9]  The CFTC expressly warned operators against listing event contracts that are contrary to the public interest or susceptible to manipulation.

The CFTC also requested public comment on potential future rulemaking addressing prediction markets last week.[10]  The CFTC solicited comments about which types of event contracts could be prohibited as contrary to the public interest, how to address trading on non-public information, and how prediction markets are similar to or different from other types of derivative exchanges.

Additionally, the CFTC publicly highlighted two enforcement actions brought by Kalshi against users who made trades while having direct or indirect influence over the outcome or access to non-public information related to the event.[11]

Each of these actions shows that the CFTC is serious about stamping out problematic trading practices in the rapidly growing prediction-market sphere.  By continuing to flex its regulatory and enforcement muscles, the CFTC is legitimizing arguments that it is well-suited to exclusively regulate prediction markets and undercutting arguments that state oversight is necessary.[12]  For its part, MLB understandably wants to protect the integrity of its sport and avoid the negative publicity and scrutiny that has ensued following recent high-profile examples of insider trading on prediction market platforms.[13]  In that sense, the MOU is a clear win-win for both sides.

[1] CFTC and MLB Sign Groundbreaking MOU, CFTC Release No. 9199-26 (Mar. 19, 2026), https://www.cftc.gov/PressRoom/PressReleases/9199-26.

[2] Memorandum of Understanding Between the Commodity Futures Trading Commission and Major League Baseball,

[3] Ben Horney, MLB Makes Multiyear Prediction Markets Deal with Polymarket, Front Office Sports (Mar. 19, 2026), https://substack.com/redirect/695ccc53-b8e5-4add-8624-cf5bbad99dad?j=eyJ1IjoiM29kb282In0.RKu4z11ZciQLFEdDl41PC86r9TS2C3xKio5zxzyRDpg.

[4] Eric Fisher & Ben Horney, Manfred: MLB Will ‘Consider Being in Business with Prediction Markets’, Front Office Sports (Feb. 12, 2026), https://frontofficesports.com/manfred-mlb-will-consider-being-in-business-with-prediction-markets/.

[5] Bill King, MLB Enters Prediction Market With CFTC Pact on Oversight and Polymarket Sponsorship, Sports Business Journal (Mar. 19, 2026), https://www.sportsbusinessjournal.com/Articles/2026/03/19/mlb-enters-prediction-market-with-cftc-pact-on-oversight-and-polymarket-sponsorship/.

[6] Fisher & Horney, supra n. 4.

[7] King, supra n.5.

[8] Id.

[9] CFTC Staff Issues Prediction Markets Advisory, CFTC Release No. 9193-26 (Mar. 12, 2026), https://www.cftc.gov/PressRoom/PressReleases/9193-26

[10] CFTC Seeks Public Comment on Advanced Notice of Proposed Rulemaking Relating to Prediction Markets, CFTC Release No. 9194-26 (Mar. 12, 2026), https://www.cftc.gov/PressRoom/PressReleases/9194-26.

[11] See John Mikuta, CFTC Plants the Flag on Regulating Prediction Markets, Ifrah on iGaming (Mar. 4, 2026), https://www.ifrahlaw.com/ifrah-on-igaming/cftc-plants-the-flag-on-regulating-prediction-markets/.

[12] See Chairman Michael S. Selig, Chairman Selig: Op-Ed | States Encroach on Prediction Markets, CFTC (Feb. 17, 2026), https://www.cftc.gov/PressRoom/SpeechesTestimony/seligstatement021726.

[13] See John Mikuta, Prediction Markets Raising Predictable Questions of Regulation, Public Policy, Ifrah on iGaming (Jan. 27, 2026), https://www.ifrahlaw.com/ifrah-on-igaming/prediction-markets-raising-predictable-questions-of-regulation-public-policy/.