Major League Soccer (MLS) announced a multiyear partnership with Polymarket on March 11, 2024, marking a significant step in the evolving landscape of sports engagement. This collaboration highlights a growing trend among sports leagues to explore prediction markets, despite ongoing concerns regarding the intersection of gambling and sports.
Polymarket, along with other prediction markets like Kalshi, allows users to trade on the outcomes of various events, including sports. Unlike traditional sportsbooks such as FanDuel and DraftKings, these platforms operate under different regulations, enabling them to function in all 50 states, including California and Texas, where sports betting remains illegal.
Regulatory Challenges and Market Dynamics
The regulatory environment surrounding prediction markets is contentious. Recently, multiple state gaming regulators filed lawsuits against Kalshi, alleging violations of state laws by offering event contracts that resemble sports bets. Kalshi contends that it falls under the jurisdiction of the Commodity Futures Trading Commission (CFTC), a federal agency. Similarly, the Nevada Gaming Control Board has initiated legal action against Polymarket to prevent it from offering certain event contracts, asserting that these violate state wagering laws.
Despite these challenges, Chris Schlosser, senior vice president of emerging ventures at MLS, expressed optimism about the partnership. In a statement to ESPN, Schlosser noted that discussions regarding the collaboration began in mid-2023, emphasizing the importance of maintaining the sport’s integrity. He stated, “If we want to ensure the integrity of our sport, we really need to lean in and figure out how best to partner with them.”
Schlosser added that Polymarket’s ability to engage soccer fans in states where sports betting is prohibited is particularly appealing. He described the platform as “intriguing,” as it allows for broader participation among fans across the United States. Currently, Polymarket operates on an invite-only basis in the U.S., requiring prospective users to join a waitlist.
Enhancing Fan Engagement and Integrity Measures
Through this partnership, MLS and Polymarket aim to enhance fan interaction during matches and throughout the season. They plan to introduce features that will enable fans to view real-time market activity, allowing them to trade on anticipated outcomes, such as the expected winner of matches or potential MLS champions.
To address integrity concerns, the partnership will implement safeguards including independent monitoring of trading activities on MLS and Leagues Cup markets. Monitoring will be conducted by firms such as IC360 and Sportradar. Additionally, individuals with access to insider information—including league and club staff, players, referees, and owners—will be prohibited from participating in trading activities.
Schlosser emphasized that players are barred from granting their name, image, and likeness for use in prediction markets, as well as in other gaming markets, such as traditional sports betting. This policy reflects the league’s commitment to maintaining ethical standards while exploring innovative avenues for fan engagement.
As MLS embarks on this new partnership, it joins a growing list of sports organizations adapting to the changing landscape of fan interaction and market dynamics. The collaboration with Polymarket represents a strategic move to engage a wider audience while prioritizing the integrity of the sport.
