MLB strikes deals with Polymarket, federal watchdog as prediction markets boom

The MLB is jumping into the prediction market frenzy with an exclusive business partnership with Polymarket and an agreement with a federal regulator, the league announced Thursday.

In a Thursday statement, MLB announced it had struck a deal with Polymarket to make the platform the league’s “Official Prediction Market Exchange” and struck a separate memorandum of understanding with the chair of the Commodity Futures Trading Commission (CFTC), the main federal agency overseeing prediction markets.

“The new agreements that we formed with Polymarket and the CFTC are imperative steps in proactively managing the new and rapidly growing prediction market space,” MLB Commissioner Rob Manfred said in a statement.

“Protecting the integrity of the game on the field is our top priority. By engaging in this community, we are able to work together to create clear boundaries with the goal of mitigating risk while providing fan engagement opportunities.”

MLB’s agreement with Polymarket gives the platform the exclusive right to use MLB marks and logos and access to official league data and marketing opportunities across the league’s events and online properties.

MLB and Polymarket also agreed to establish a framework meant to prevent betting activity that could harm the integrity of MLB games, which has become a growing concern for the league as it embraces the financial boon of deals with professional sportsbooks.

Two MLB pitchers are currently facing federal charges after allegedly helping associates place thousands of dollars on bets related to their own performance, then purposefully throwing balls in ways that would fulfill those those bets but hinder their team.

Cleveland Guardians pitchers Emmanuel Clase and Luis L. Ortiz are expected to stand trial in November and have been suspended by MLB indefinitely. The league prohibits all players, coaches and umpires from betting on baseball in any capacity, and those found to have done so are banned from MLB for life.

MLB said Polymarket has agreed to “restrict” certain markets, such as bets on individual pitches — the focus of the Guardians scandal — managerial decisions and umpire performance, that could harm the integrity of the game.

The league is also teaming up with the CFTC to help monitor prediction markets and weed out betting conduct that could harm the game. MLB and the CFTC agreed to share information confidentially and meet regularly to discuss prediction market issues.

“The MOU [memorandum of understanding] is a collaborative step towards promoting the integrity and resilience of the prediction markets relating to professional baseball. Through this MOU, the CFTC is well-positioned to add additional tools to protect these markets and its participants from fraud, manipulation, and other abuses,” CFTC Chair Mike Selig said.

MLB’s announcements are the league’s latest step toward mitigating the risks of online betting while embracing sponsorship deals with rapidly rising online gambling platforms. The league in November reached agreements with DraftKings and FanDuel to limit the types of bets able to be placed on MLB games in the wake of the Guardians scandal.

Even so, MLB’s new partnership with Polymarket is likely to draw more scrutiny amid growing backlash to prediction markets and concerns about their ability to facilitate insider trading.