MLB Asks CFTC to Ensure ‘Integrity’ of Bets on Exchanges Like Kalshi

MLB has sent a letter to the Commodity Futures Trading Commission (CFTC) lobbying for exchange-based platforms to have the same “integrity” controls as sportsbooks. 

The letter, which was first reported by Dustin Gouker’s Substack page The Closing Line, was sent to CFTC acting chair Caroline D. Pham Friday by Bryan Seeley, MLB’s EVP of Legal & Operations. 

The letter noted that exchanges—which label their betting markets as “event contracts”—don’t currently offer lines on player props or single-game events that could be manipulated by bettors with inside information, but that the league expected those wagers to “arrive soon.”  

“As the resemblance between sports event contracts and traditional sports betting markets continues to grow, so too does the need to replicate the integrity and consumer protections that exist at the state level,” the letter said. “Currently, those protections are lacking. For example, MLB is not aware of anything that would require exchanges and brokers to notify leagues of potential threats to game integrity, cooperate with league investigations into player, umpire, or employee misconduct, or share data for integrity purposes. MLB has been advised that some exchanges and brokers take the position that they are not even permitted to share information with MLB under current CFTC regulations.”

A spokesperson for Kalshi, an exchange that offers MLB World Series futures sent this statement:

“We appreciate MLB’s comments, and look forward to working in partnership with all of the leagues. As a highly regulated futures contract operator, we have a shared desire to ensure transparency, integrity and data sharing. Our goal is to collaborate with the leagues and promote a fair and transparent market.”

The CFTC did not respond.

Exchanges like Kalshi and Crypto.com have dipped their toes in sports betting waters. Both offered lines on the Super Bowl, and Kalshi offers action on the winner of other sporting events like the NCAA Tournament and The Masters. Kalshi successfully battled the CFTC in court for the right to offer election wagering last year. 

Last week, Nevada gaming regulators ordered Kalshi to cease and desist operating in the state. 

“While we’re disappointed with the Commission’s assessment, Kalshi has always held the utmost respect for regulators and the regulatory process,” a Kalshi spokesperson told Front Office Sports in a statement last week. “We’ve been a federally regulated exchange for over four years and a federally regulated clearinghouse for about six months. We are proud to have paved the way for prediction markets to thrive in the U.S. We look forward to a swift resolution to this matter and to ensuring that Americans continue to have access to safe, regulated, and transparent prediction markets.”

The CFTC announced a 90-day review period regarding the legality of sports event contracts on Jan. 25.