MLB is considering partnering with prediction markets:

Owners were briefed this week at their quarterly meetings about the possibility of partnering with Polymarket and Kalshi, federally regulated markets that allow wagering in an endless array of areas, including sports. MLB’s partnerships with sports gambling companies give it access to the sort of data that tied Guardians closer Emmanuel Clase and starter Luis Ortiz to irregular betting patterns last year and wound up in their arrests.

Striking a deal with prediction markets, the commissioner said, would allow the league similar access to monitor a business so new that Manfred only learned of it in recent months. Currently, the NHL and UFC are the only major professional sports leagues partnering with Polymarket and Kalshi.

ESPN.com

While I dislike and discourage gambling, prediction markets try to harness wisdom of the crowds to see where things might be headed. For example, currently at Manifold, there is a 64% chance that the 2027 season is delayed due to issues over the new CBA. Prediction markets are more like future markets than straight bets. I asked Claude.AI to explain the differences:

A bet in the traditional sportsbook sense is a wager placed with a bookmaker. The bookmaker sets the odds, and you’re essentially betting against the house. The house takes a cut (the “vig” or “juice”), and your possible outcomes are binary — you win your payout or you lose your stake. Once you place the bet, you’re generally locked in. You can’t sell your position to someone else if circumstances change. DraftKings, FanDuel, and similar platforms operate this way.

A futures contract in the financial sense is an agreement to buy or sell something at a specific price on a specific future date. These originated in commodities — a farmer locking in a price for next year’s wheat crop, for example. The key distinction is that futures are standardized, traded on regulated exchanges like the CME, and involve margin requirements. They’re primarily tools for hedging risk or speculating on price movements, and you can exit your position anytime by selling the contract to another party before expiration. Sports futures bets (like “Yankees to win the World Series at +950”) borrow the terminology but are structurally just long-duration bets with a bookmaker.

A prediction market position is closer to a futures contract than a traditional bet. On platforms like Kalshi, Polymarket, or Manifold, you’re buying shares that pay out $1 if an event happens and $0 if it doesn’t. The price fluctuates based on supply and demand from other participants, so a share trading at $0.42 implies a 42% probability. Crucially, you’re trading against other participants in a market, not against a house. And like futures, you can sell your position before the event resolves — so if you buy “MLB lockout delays 2027 season” shares at $0.42 and sentiment shifts so they’re trading at $0.70, you can sell for a profit without waiting for the outcome. The market-clearing price is what makes these useful as forecasting tools, since it aggregates the collective judgment of everyone with skin in the game.

The practical upshot: a bet is a fixed wager against a bookmaker, a futures contract is a tradeable obligation on a regulated exchange, and a prediction market position is a tradeable share in an event outcome. The prediction market sits somewhere between the other two — it has the event-outcome structure of a bet but the tradability and price-discovery function of a financial market.

Claude.AI

Note that prediction markets have the potential to help MLB manage challenges to the game. The CBA market above is an example. I suspect the owners and players would rather not delay the 2027 season. If the sentiment in that direction keeps getting worse, maybe one or both sides start moderating their positions. What do participants in the market think of the odds of more prop-bet cheating? What are the odds of a rise in PED use? What is the probability of a $70 million per year contract for a player by 2028?

I’m glad MLB is looking into this. There’s something to be gained from these markets.