Senator contacts leagues over 'gambling's ugly takeover'

As prediction markets expand partnerships with major U.S. sports leagues, a U.S. senator sent letters to six league commissioners Thursday raising concerns about "gambling's ugly takeover of sports."

In letters to the commissioners of the NFL, NBA, NCAA, MLB, NHL and MLS, Sen. Richard Blumenthal, D-CT, asked the leagues to provide information by May 1 about their partnerships with both sportsbooks and prediction markets and how they are safeguarding sporting integrity, preventing gambling addiction and protecting athletes from abuse.

"Since the federal ban on sports gambling -- a ban supported by the leagues -- was overturned eight years ago, gambling has permeated every aspect of the game," he wrote. "The consequences of this rampant rise of sports gambling have been accelerating addiction, threats to players and even the corruption of the game."

Blumenthal added that the growing prediction market space -- where users can trade on the yes/no outcome of events including sports -- has "only made the problem worse."

He asked the leagues for a list of all partnerships with sportsbooks and prediction markets, the data shared between them and restrictions on the types of wagers offered.

"Pervasive sports betting culture has fans rooting for a payout, not their favorite teams, and dehumanizes players into financial assets, with even their health and safety as the subjects of bets," Blumenthal wrote.

The NCAA is the only one of the six organizations that does not have a commercial sportsbook partnership, though it signed a data sharing agreement with licensed sportsbooks last year. The MLS, NHL and MLB have all signed partnerships with prediction markets in the last six months, while the NFL and NCAA have publicly expressed concerns about the safeguards around prediction markets.

MLB and MLS declined to comment. The NFL referred ESPN to a letter it sent prediction market companies last month. ESPN has reached out to the NBA, NHL and the NCAA for comment.

In his letter, Blumenthal also waded into the question of regulating prediction markets -- a hotly contested legal issue. He noted that states have sued to block prediction markets "over their attempts to circumvent state gambling regulations" and asked the leagues how they will ensure that any partnerships with prediction markets do not violate state laws.

Prediction market companies such as Kalshi have argued in courts across the country that they fall under the jurisdiction of the Commodity Futures Trading Commission, a federal agency, not state gambling regulators. This week, a federal appeals court sided with Kalshi over New Jersey gaming regulators and the CFTC asked a judge to stop Arizona's criminal case against Kalshi.

In recent court filings, the CFTC has argued that it has "exclusive jurisdiction" over the space. Last week the agency sued three states -- including Connecticut -- over their attempts to regulate prediction markets.

Last month, Blumenthal introduced legislation that would ban insider trading on prediction markets, restrict users under the age of 21 and make clear that prediction markets are not exempt from state oversight.