Prediction-market companies insist they are not gambling platforms, a distinction federal regulators have accepted, allowing them to offer sports-related contracts even in states where sports betting is restricted. However, not everyone in professional sports is convinced.
Late in the 2025 season, Major League Baseball sent a memo to all players prohibiting participation in baseball-related prediction markets on platforms like Kalshi and Polymarket, Front Office Sports reports.
A Violation of Sorts Betting Rules
The memo, titled “Re: Baseball Related Prediction Markets,” came jointly from Commissioner Rob Manfred’s office and the players’ union.
It told players not to “participate in ‘prediction markets’ to risk money on any outcome related to baseball games or events,” framing it as a violation of existing sports betting rules.
The memo highlighted that “several companies (including Kalshi, Robinhood, and Crypto.com, among others) are currently offering what they call ‘prediction markets,’ which allow members of the public to risk money on the outcome of specific events, including baseball and other sporting events.”
It was dated August 26, 2025, though it referenced screenshots from Kalshi’s MLB markets as early as May 5.
Two MLB team sources confirmed the memo went out across major and minor leagues and was posted in locker rooms. Yet, some players remain unaware of its existence, with three of them telling FOS they had not received any communication from the league or union about potential rule violations tied to prediction markets.
Mixed Decisions
Kalshi launched its MLB markets on April 16, four months before the memo was issued. MLB has not explained when it first learned of these markets or whether players who used them before August 26 might face leniency.
While MLB has embraced traditional online sports betting, lobbying with the NBA and PGA, and signing deals with DraftKings and FanDuel, the league has remained cautious about newer prediction-market models.
Other leagues have taken different approaches. The NHL has partnerships with Kalshi and Polymarket, while the NFL has expressed concern over their lack of regulation, noting that the products “mimic sports betting.”
The NBA is dealing with a gambling scandal and has asked the CFTC for regulatory guidance on prediction markets.
Under President Donald Trump’s administration, the regulatory environment has been more favorable to prediction markets. Kalshi won a lawsuit against the CFTC blocking election-related contracts under Biden, and Polymarket recently relaunched in the U.S. after a four-year ban.
MLB has stressed that prediction-market exchanges often lack the consumer protections and integrity measures in place for traditional sports betting.
The league’s concerns were underscored when betting-integrity firm IC360 flagged activity involving Guardians pitcher Luis Ortiz, who, along with teammate Emmanuel Clase, faces federal wire fraud conspiracy charges and is on leave during ongoing investigations.