Major League Baseball (MLB) recently announced a new partnership with Polymarket, a prediction market platform. MLB, the latest professional sports league to partner with a prediction market platform, will give Polymarket exclusive rights to MLB marks, logos and access to official league data, while claiming the deal will “protect the integrity of the game.” With recent sports betting scandals impacting both college and professional sports – including MLB – critics are skeptical of this new partnership’s goal of integrity and how much it actually differs from sports betting.
Joel Maxcy, PhD, a professor in Drexel University’s LeBow College of Business and sports economist, explains the history of legalized sports betting, the regulations in place for governing both sports betting and prediction markets and how these partnerships impact professional sports.
Can you give a little background on sports betting’s legalization and integration into professional sports and sports media?
Sports betting was legal primarily only in Nevada which legalized gambling in 1931. The Professional and Amateur Sports Protection Act of 1992 (PASPA) formally made the business of bookmaking illegal by Federal law in almost all other states. In 2012 New Jersey voters approved a constitutional amendment to legalize sports betting, which set off much litigation, eventually leading to the U.S. Supreme Court’s decision in 2018 that struck down the PASPA. Numerous states, now 39, followed New Jersey and legalized sports betting. The Court’s ruling set the country on a path to widespread, legal sports betting.
Professional leagues, including the National Football League (NFL), National Basketball Association (NBA) and National Hockey League (NHL), have all signed official partnerships with sportsbooks such as DraftKings, FanDuel and MGM Resorts. These agreements are now worth billions of dollars in total. Leagues sell official league data to sportsbooks to ensure accurate real-time odds for in-play and proposition (prop) bets. Networks (e.g., ESPN and NBC Sports Philadelphia) now feature betting analysts and display live point spreads and odds during game coverage. Sportsbooks spend billions on advertising, leading to a saturation of commercials during live sporting events.
Can you explain the difference between sports betting and prediction markets?
Prediction markets and sports betting both allow people to speculate on future outcomes, but they operate in fundamentally different ways. The more familiar sports betting uses bookmakers who set fixed odds for contest outcomes. Consumers/clients bet against the house rather than against other participants.
Prediction markets use open trading and “crowd-driven” prices to forecast the probabilities of given outcomes. Prediction markets are platforms where users trade on the likelihood of the outcome of future events. Instead of placing a wager against a bookmaker, participants buy and sell outcome positions in a market. Prices fluctuate based on supply and demand, reflecting the collective belief about how likely an event is to occur. They are largely analogous to commodity and currency futures markets.
There have been recent sports betting scandals in both college and professional sports. How is sports betting being regulated?
Federally, the Wire Act of 1961, prohibits the use of interstate wire communications, including the internet, to place bets. Wagers must made within the state where the operator is licensed.
However, now sports betting in the U.S. is primarily regulated at the state level following the Supreme Court’s 2018 decision. Individual states establish their own gaming commissions to oversee licensing, compliance and enforcement. Operators like DraftKings and FanDuel obtain state-issued licenses, undergo background checks and meet strict financial requirements.
Rules on betting on college sports vary significantly across states. Some states allow it; many prohibit bets on in-state teams or individual college athlete prop bets. College sports and gambling is under more scrutiny.
How is the prediction market being regulated – especially as these partnerships emerge?
Kalshi and Polymarket, the leading prediction market firms, are being challenged by individual states on the basis that their services approach sports betting. As of March 2026, the regulation of prediction markets in the United States is at an important inflection point. It has been largely unregulated. But it appears to be heading towards a more heavily examined industry. These markets are now primarily regulated by the Commodity Futures Trading Commission (CFTC). In 2026, the CFTC adopted a proactive role in regulating prediction markets as financial products. There are conflicts. Some states treat the prediction market establishments, Kalshi and Polymarket, as gambling, and now federal legislative efforts threaten to restrict their expansion into sports betting.
Do you think there will be similar scandals with prediction markets?
Absolutely. There is a payoff to knowing or fixing an outcome so the incentive to cheat is the constant across gambling and prediction markets. Although the methods to create fraud may need to be more sophisticated in the latter.
What else do you think is important to add to the conversation about sports betting and prediction markets, especially in the context of college and professional leagues?
I think sports leagues need to be wary of prediction markets and take another look at sports betting in general. Professional sports leagues have eagerly embraced sports gambling since 2018 and that’s been lucrative for them. However, they risk sacrificing the integrity of their games, which was the reason for their adamant opposition to sport gambling until 2018. Prediction markets suggest all the same risks but, given all the uncertainty and lack of information surrounding them, may be even more challenging to monitor.
Reporters interested in speaking with Maxcy should contact Annie Korp, associate director, News & Media Relations, at 215-571-4244 or amk522@drexel.edu.
