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Read Full BioThe American Gaming Association (AGA) has sent letters to the NFL, NBA, and MLB pleading with the leagues not to follow the NHL in making a deal with prediction market platforms.
The letters state that prediction market platforms such as Kalshi and Polymarket are “insufficiently regulated” and “devoid of the consumer and integrity protections that define legal sports betting.”
AGA President Bill Miller signed off on the letters, noting that the leagues have “played a constructive role in helping to shape a legal, regulated sports betting market that enhances fan engagement while preserving integrity.”
Miller added that “Aligning with platforms that circumvent these regulations would undermine that progress and expose the league to reputational and regulatory risk.”
The NHL announced a multi-year partnership with Kalshi and Polymarket last week. It is the first major sports league to officially approve sports prediction markets, which have faced strong opposition from state regulators, tribal groups, and other pro sports organizations.
Kalshi and Polymarket can use the NHL’s trademarked terms and logos on their platforms as part of the deal. They will also feature in NHL game broadcasts with company branding on digital boards.
Official Deals Enhance Legitimacy of Prediction Markets
Sara Slane, formerly a Senior Vice President at the AGA, now serves as Kalshi’s head of corporate development. Commenting on the NHL deal, she said, “To have a partnership with [the NHL] obviously speaks to our legitimacy.”
She noted that the company is eyeing deals with all major leagues, adding, “We want to work with all the leagues. That is our intent.”
Other than the NHL, Kalshi has partnered with the Pro Pickleball Association, but other major leagues have voiced concern over the rise of sports prediction markets.
The NBA and MLB both sent letters to the Commodity Futures Trading Commission (CFTC) earlier this year expressing concerns about the risk the markets pose to the leagues’ integrity.
With a betting scandal engulfing the NBA at the moment, it is unlikely the pro basketball organization will want to make any deals related to gambling at this time.
The NFL has similarly warned personnel about any involvement with sports event contracts, which it considers the same as sports betting.
FanDuel & DraftKings Eye Prediction Market Entry
The AGA is a broad trade association for the legal, regulated U.S. gaming industry. Its members include sports betting operators, casinos, tribal gaming, and suppliers. The organization opposes prediction markets as a threat to the gaming industry.
Its website has a running tracker of how much tax revenue has been lost since sports event contracts were launched at the start of the year. The total is currently at over $113 million and rising by the second.
Some AGA members, however, are exploring ways to monetize the rise of prediction markets. FanDuel has made a deal with CME, and there is talk that the partnership could launch sports prediction markets.
DraftKings also made a long-discussed move into the space by acquiring Railbird, a CFTC-licensed platform, last week. The new venture plans to launch “DraftKings Predictions,” and CEO Jason Robins said the company is now positioned to “win in this incremental space.”
Legal Battles Show No Signs of Slowing
The legal fights around the legal status of prediction markets appear to be never-ending.
States have warned licensed sportsbooks about offering the controversial markets or partnering with prediction market platforms. Illinois became the fifth state to send a letter to its licensed operators this week, following Arizona, Ohio, Nevada, and Michigan.
In addition, New York became the eighth state to send a cease-and-desist letter to Kalshi this week. In response, the company filed a counter-lawsuit.
This follows a series of legal challenges brought by state gambling regulators, tribal groups, lawyers, and users who claim prediction markets are operating illegal sports betting.
Verdicts in the numerous court battles could bring some resolution to the ongoing disputes. So far, however, there has been no definitive conclusion as to whether the markets are legal under federal law. The CFTC has remained relatively silent, and it will be up to judges to decide.
In the meantime, the value of Kalshi and Polymarket has skyrocketed. Both companies are now valued at billions of dollars as they continue to expand despite the legal pushback.
