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(AsiaGameHub) – While the NBA continues discussions with a U.S. federal derivatives regulator regarding an integrity framework for prediction markets, the league submitted public comments this week in connection with a comment period for proposed rulemaking.
In a four-page letter submitted to the U.S. Commodity Futures Trading Commission, the NBA restated its position that sports-event contracts should be subject to comprehensive regulations aimed at protecting the integrity of the sport. Dated 30 April, the letter from Dan Spillane, the NBA’s assistant general counsel for league governance & policy, was submitted on the final day of the public comment period for the Advance Notice of Proposed Rulemaking concerning prediction markets.
“There is no higher priority for the NBA than protecting the integrity of our games and preserving public confidence in our league and in our sport,” Spillane wrote.
The NBA sent the letter just days after Commissioner Adam Silver confirmed that the league had held discussions with the CFTC on a potential integrity framework for prediction-market trades involving basketball. Like several other professional sports leagues, the NBA’s willingness to potentially partner with the CFTC would mark a shift from its previous stance on prediction markets.
A Focus on Official Data
Typically, sports event contracts are listed on Designated Contract Markets (DCMs), otherwise known as regulated exchanges that facilitate trading of futures, options and swaps. Spillane supports requirements for DCMs that would bar athletes, game officials and other league and team personnel from trading any contracts tied to their league’s games and events.
Additionally, he emphasized that DCMs should be mandated to cooperate with integrity-related investigations carried out by national sports governing bodies. For probes into suspicious trading activity, the NBA has urged the CFTC to require DCMs to share specific traders’ identities with the league conducting the inquiry.
Earlier this week, a U.S. Army Special Forces soldier who won roughly $400,000 on a Polymarket trade centered on the ousting of Venezuelan President Nicolas Maduro pleaded not guilty to using classified intelligence for that transaction. This trade serves as a prime example of the risks tied to insider trading. On Thursday, Polymarket announced it has selected blockchain data platform Chainalysis to enforce its market integrity rules across the DCM’s DeFi platform.
Shortly after the landmark PASPA ruling, Spillane traveled across the country to inform state legislators about the importance of using official league data throughout the bet settlement process. In his letter, Spillane referenced officially verified league data on multiple occasions. To maintain consumer confidence, he wrote, DCMs should be required to use official league data to settle sports-related contracts.
Silver Praises CFTC’s Commitment to Integrity
Speaking at an Associated Press Sports Editors event on 27 April, Silver lauded the CFTC for collaborating with sports leagues to prioritize integrity. While the NBA has yet to finalize an integrity framework with the agency, Silver noted that a potential partnership would likely mirror the Memorandum of Understanding the CFTC signed with Major League Baseball in March.
Once completed, this framework could pave the way for the NBA to potentially sign a marketing deal with a leading prediction market operator such as Kalshi or Polymarket.
“We aren’t necessarily adverse to entering into licensing deals with them,” Silver said. “But again, the league’s number one role is to ensure the integrity of the competition. And that’s what we’re most focused on right now.”
Silver made these comments during the same week that two NBA-associated figures appeared in Brooklyn federal court in connection with a widespread illegal betting scandal. On Monday, Assistant U.S. Attorney Kaitlin Farrell told a judge that prosecutors will likely file additional charges against former Miami Heat guard Terry Rozier. During a hearing before U.S. District Judge LaShann DeArcy Hall, Rozier learned he could face charges of honest services fraud and sports bribery later this month.
Rozier is facing charges in U.S. v. Earnest, a case involving a scheme to defraud several leading U.S. sportsbooks. Damon Jones, another defendant in the case, pleaded guilty on Tuesday to two counts of conspiracy to commit wire fraud. Jones, a former unpaid assistant with the Los Angeles Lakers, admitted to providing inside information to a group of bettors to defraud a sportsbook out of money. Jones is scheduled to be sentenced next January.
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