WASHINGTON, Oct 26 (Reuters) – US regulators and the National Basketball Association entered into a cooperative agreement over prediction markets, the Commodity Futures Trading Commission said on Monday, amid concerns about insider trading and market oversight.
The two entities agreed to share related information that could have a direct impact on the “integrity” of professional basketball, according to a copy of their memorandum of understanding signed by CFTC Chairman Michael Selig and NBA Commissioner Adam Silver.
Representatives for the NBA could not be immediately reached for comment.
The pledge follows a recent sports betting scandals that have resulted in lifetime bans from the NBA and other charges, including the arrest of more than 30 people last year in connection with a federal probe into illegal gambling.
The CFTC has asserted oversight of prediction markets, arguing they are facilitating trading in a type of financial instrument and reiterated its stance in the agreement released on Monday.
Multiple states have sued to block the CFTC’s attempt to assert oversight, arguing prediction markets are facilitating gambling and as such their sports bets should be subject to stringent state laws.
(Reporting by Susan Heavey and Amy Tennery; additional reporting by Michelle Price; Editing by Doina Chiacu)
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