MLB Warns Players Prediction Markets Are a Form of Gambling

The MLB has finally weighed in on controversial sports prediction markets.

The MLB sent a memo to all players to confirm that the league is considering prediction market platforms as a form of gambling. That means any players who are discovered to be using them will be violating the MLB’s heavy-handed gambling laws, with a lifetime ban being the most likely form of punishment.

The MLB’s memo is a win for the industry’s opponents, who feared pro sports leagues would back it.

League Doesn’t Buy Industry Arguments

The MLB’s memo is bad news for prediction market operators. While it carries no real legal consequences, it is a very public rebuke of the argument that the new industry isn’t offering gambling. 

The MLB's classification of the industry as gambling could also affect the NBA and NFL, which have been hesitant to work with prediction market operators. If those leagues also determine that the offering constitutes gambling, it would complicate the industry’s ability to defend itself against an endless slew of lawsuits. 

NHL Partners With Kalshi

While we await more information from the country’s three largest sports leagues, the NHL seems to have already made its decision.

The hockey league announced a new partnership with Kalshi, which was one of the first operators to offer sports prediction markets. Their platform has expanded to allow for parlays and player props, making it almost indistinguishable from sports betting.

While NHL players and staff will likely be banned from using hockey-related markets, they could be allowed to use them for other events.

There is an argument that the NHL is more desperate for additional revenue, lacking the impressive TV deals of the other three major sports leagues. Regardless of whether that is true, hesitation from the NBA, NFL, and MLB carries far more weight. 

Sportsbooks Enter the Prediction Market Industry

To everyone's surprise, Fanatics launched a prediction market platform for sports last week. They became the first major sportsbooks to enter the new industry, joining DFS giant Underdog. While the initial launch was limited to a handful of states, many more are expected to go live in the coming weeks. Those include some states with legal sports betting markets.

While Fanatics is the first major operator to launch a prediction platform, it will soon be joined by FanDuel and DraftKings. The two sports betting giants have platforms under development and hope to launch as soon as the end of December.