MLB further embraces sports betting in deal with prediction platform Polymarket

Major League Baseball has made its first foray into prediction markets, partnering with Polymarket, one of the leading companies in a space that has grown in both popularity and legal controversy.

Prediction markets allow users to bet on sports and other events, including in politics and pop culture, through the buying and selling of contracts, similar to a stock exchange. But similarities to traditional sports gambling, which is taxed and regulated differently, have prompted legal battles in several states.

MLB and Polymarket declined to disclose the terms of the deal. Front Office Sports, which first reported the arrangement, cited sources saying the deal will pay MLB $300 million over four years. The deal can be voided if courts rule that prediction markets violate state law, a league official who was not authorized to speak publicly said, confirming a report from ESPN.

MLB positioned the Polymarket deal as a boon for the sport’s integrity, the same framing the league has given to its partnerships with traditional sports gambling companies. In a simultaneous announcement Thursday, the Commodity Futures Trading Commission, a federal body that oversees prediction markets, said it had reached a non-binding memorandum of understanding with MLB that marked “the first of its kind between the CFTC and a professional sports league.”

“The CFTC is in active discussions with nearly every other major sports league,” commission spokesperson Brooke Nethercott said by email.

“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,” said baseball commissioner Rob Manfred in the league’s news release. “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.”

The rise of legalized sports gambling across the U.S. has contributed to major scandals for various sports circuits, including baseball. In an ongoing case, federal prosecutors have alleged that two pitchers for the Cleveland Guardians, Emmanuel Clase and Luis Ortiz, rigged what pitches they would throw for their financial gain. The pitchers have said they are not guilty.

Polymarket and the CFTC are both to share information with MLB that is intended to help catch suspicious activity.

“We will work collaboratively with MLB to identify what types of markets pose unreasonable integrity risks for the game of baseball, and try to get those out of the market, with the goal being, how do you protect customers?” Ari Borod, Polymarket’s president of sports business, told The Athletic. “How do you protect the game of baseball? And how do you protect the prediction market category broadly?”

MLB declined an interview request.

Attorney Doug Mishkin, a partner at the firm BCLP who worked on gambling and commercial transactions at the NFL from 2016 to 2022, said he sees parallels between 2018 and today. That year, the Supreme Court overturned a federal ban on sports gambling, opening up a new world for operators.

“There was this theme that, ‘Oh, how hypocritical of the sports leagues that they’re now getting into bed with all of these, these operators and official sports-betting sponsorships, when they had for years been fighting it and saying it was threatening the integrity of the game,’” Mishkin said. “But strategically, once the law had changed and it was going to be happening regardless, at that point, you don’t really have much of a choice.

“It’s sort of a similar dynamic here. You have the prediction markets they’re operating. They have millions of customers.”

Polymarket this month announced a partnership with data companies Palantir and TWG AI “to identify both suspicious trading activity, as well as trading by prohibited participants who probably shouldn’t be engaging and trading on certain outcomes,” Borod said.

Borod declined to provide specifics on which market types would not be offered on Polymarket.

A type of bet called “prop bets,” which sits at the center of the Clase and Ortiz case, has been particularly scrutinized in baseball. As opposed to a wager on the overall outcome of a game, prop bets center on micro events, such as the result of a given pitch.

Shortly after Clase and Ortiz were indicted, MLB and its traditional sports books partners announced they were capping pitch-level prop bets at $200 each, as well as forbidding their inclusion in parlays, a string of bets made at once that bring increased payouts, but require all the bets to be successful.

MLB, in its Thursday news release, said it would work with Polymarket “to restrict markets that present an integrity risk to MLB, such as individual pitches, manager decisions, and umpire performance, among others.”

Polymarket’s exact restrictions on MLB prop bets are unclear, however.

“I can’t share different specifics on parameters, but what I can share is that props that are easily susceptible to manipulation, or that, again, raise unreasonable integrity concerns, we want to keep those out of the game as well,” Borod said.

MLB has also had an eye on minimizing betting in the minor leagues, the vast network of affiliated teams where young players earn less than their big-league counterparts, and could be more susceptible to attempts to influence play for financial gain. The league’s deal with Polymarket does not include Minor League Baseball, Borod said, while indicating Polymarket will nonetheless work with MLB regarding any minor-league markets. MLB ultimately controls the minor leagues.

“Our commitment on integrity and sports goes across sports broadly,” Borod said. “I think we would want to do our best for customers and the category regardless. What this does is give us an extra layer of insight in working directly with the league itself.”

While Polymarket gains access to various MLB marks and intellectual property, MLB has said it intends to additionally reach “integrity relationships with all other prediction market exchanges offering baseball contracts.”

The Clase and Ortiz case created questions as to the efficacy of MLB’s information-sharing arrangements. Prosecutors say Clase began to rig pitches in 2023, but he wasn’t placed under league investigation until 2025.

MLB’s continued efforts to highlight business deals as necessary for the game’s betting protection lead to a question of whether integrity could be protected without a financial arrangement.

“I don’t know if there’s no other way, but I can certainly say that the best way to do things is to collaborate with those involved and MLB,” Borod said.

Mishkin said the only way for leagues to secure terms they want that do not otherwise come through legislation is through a contract negotiation.

“And then the question is, do you also need to charge for the assets you’re providing?” Mishkin said. “I would say, I guess, theoretically not. But the leverage that you ultimately have here to secure the terms that you want as it relates to integrity and information sharing and the like, is going to be based on your licensing of IP. To not charge for that too seems like it would run counter to the basic revenue-generating responsibilities of a league.”

MLB’s arrangements with both Polymarket and the CFTC have confidentiality requirements. The memorandum between the league and the CFTC says the commission’s information can be disclosed to owners serving on MLB’s executive council, but is not to be disclosed more broadly to clubs or owners unless it “relates to an active MLB integrity matter.”

Eight owners serve on the league’s executive council, which closely advises Manfred: Mark Attanasio of the Milwaukee Brewers, Steve Cohen of the New York Mets, Paul Dolan of the Cleveland Guardians, John Fisher of the Athletics, Greg Johnson of the San Francisco Giants, Arte Moreno of the Los Angeles Angels, David Rubenstein of the Baltimore Orioles and Bruce Sherman of the Miami Marlins.

Other sports leagues have already partnered with prediction markets. The National Hockey League in October announced a partnership with Polymarket’s top rival, Kalshi. Polymarket reached a deal with Major League Soccer in January and one with Ultimate Fighting Championship in November.

Meanwhile, legal battles are being waged in various states over whether prediction markets should be treated as traditional sports gambling. Mishkin said he expected at least a couple of years to be needed to sort through the various issues.

“No one is disputing that this is the act of risking money for a chance to win more money based on the outcome of sporting events, or athletes in those events,” Mishkin said. “At bottom, it’s a form of gambling.”

But so too is the stock market, Mishkin said, which is covered under different laws than sports betting is. “Legally, is it sports betting? That’s an interesting question, and that’s what’s going to be worked through now.”

Arizona’s attorney general this week brought criminal charges against Kalshi, alleging the company has been operating an illegal gambling business without a license. Kalshi, which had previously sued the state, called the claims baseless. Polymarket sued Michigan earlier this month.

Casinos are also lobbying against prediction markets.

Borod said that a key difference between standard sports books and prediction markets is that the house doesn’t profit off the result. The companies make money via commissions and fees, which means they are motivated to see a high volume of trades.

“We don’t have a stake in the outcome,” Borod said. “We don’t benefit off the outcome of what’s happening in the game. And so what we’re really trying to do is create a marketplace where customers can engage in their favorite games.”

Prediction markets offer contract trading on many types of events, including in geopolitics, which has created a different set of controversies. Kalshi this month said it would not pay out millions of dollars in expected winnings to those who had bet on the fall of Ayatollah Ali Khamenei, Iran’s late supreme leader. The company cited a prohibition on wagers involving death.

Federal lawmakers are attempting to further regulate prediction markets.

“Prediction markets have become a haven for insider trading, market manipulation, and underage gambling,” said U.S. Senator Richard Blumenthal of Connecticut in a news release this month. “These billion-dollar businesses are turning war into a casino game, and creating a market for national security leaks.”