Amid the rise in prediction markets, the U.S. Commodity Futures Trading Commission (CFTC) signed a deal today with the National Hockey League (NHL), pledging that they will cooperate to guard against misconduct in those fledging trading venues.
The CFTC is actively defending the growth of prediction markets in a series of legal actions against states that have sought to clamp down on the activity. Most recently, earlier this week, it sued the state of Minnesota in an effort to block a new state law that would make it a felony to operate a prediction market. It’s seeking an injunction to put a stop to that law before it takes effect on August 1.
Today, the regulator signed a memorandum of understanding (MoU) with the NHL that aims to protect the integrity of the sport of hockey, and the markets that offer trading on its activities.
Among other things, the agreement sets out the commitments of the CFTC and the NHL to share information and coordinate on issues involving pro hockey and related event contracts that are being traded on markets regulated by the CFTC.
The MoU provides that the CFTC and the NHL will adopt safeguards, “to protect the confidentiality” of the information shared under the agreement.
It also designates representatives — from the CFTC, general counsel, Tyler Badgley, and the NHL’s senior vice-president and deputy general counsel, Conal Berberich — as points of contact between the organizations.
“This agreement is another step toward safeguarding the integrity of sports and protecting market participants in prediction markets from insider trading, fraud and other abuses,” Michael Selig, chairman of the CFTC, said in a statement.
The NHL said that it has implemented “layered protections to monitor these markets.”
“Our agreement with the CFTC enhances the comprehensive integrity monitoring systems already in place and strengthens our ability to identify, deter and address potential risks,” said Gary Bettman, commissioner of the NHL.
“This MoU reflects a shared commitment to transparency, oversight and protecting the integrity of the game,” he added.