NBA Commissioner Adam Silver Dunks On Trading Markets, Talks Sports Betting

NEW YORK - NBA Commissioner Adam Silver wants to slap a flagrant foul on legal trading markets offering sports-based outcomes and prefers a federal framework to oversee legal sports betting. 

Silver said The Association is monitoring the growth of legal trading markets offering NBA-based outcomes but remains opposed to them being allowed operate without the same regulatory guidelines which govern legal sports books.

“These new trading markets, we're watching them very closely. We are not participating in them. We are not accepting advertising money from them” Silver said while replying to a question from Bookies.Com during the annual Associated Press Sports Editors Commissioners Meetings. “I am concerned about what integrity protections are in place for those trading platforms. And our strong preference again would be for those to be regulated markets. We think that puts us in the best possible position.”

Following Silver's response to the question from Bookies.Com on Monday, the NBA sent the following letter to the Commodities Futures Trading Corporation on Thursday. 

Legal Trading Markets Move Into Sports Space

Legal trading markets flourished ahead of the presidential election and have since moved into taking trades on sports-related outcomes. They have been allowed to operate until the governance of the Commodities Futures Trading Corporation while their fate is being litigated in federal court. 

Multiple states have filed cease-and-desist orders against Kalshi. That platform has handled more than $27 million in trades on the first round of the NBA playoffs, and has more than $16 million in trades based on the “Pro Men’s Basketball Champion” - also known as the NBA Finals winner.

Kalshi is battling Nevada and New Jersey regulators in court and has received cease-and-desist orders from agencies in Illinois, Maryland, Montana, and Ohio. Additionally, the Michigan Gaming Control Board wrote to the CFTC saying it believes sports-betting contracts are “equivalent” to wagers and subject to its oversight in that state. 

Legal books use multiple layers of technology to monitor wagers and those who place them. Most have integrity agreements with the NBA and other pro leagues as part of their licensing arrangements. Kalshi and other trading markets have no such guidelines. Sporttrade is the only state regulated sports betting exchange to seek CTFC approval to offer trades nationwide. 

Kalshi allows funding through crypto, something prohibited in the legal betting space. 

Integrity Remains Paramount Concern For Silver

Ahead of this season, the NBA and several betting partners, including DraftKings, FanDuel, and BeMGM, struck a deal ending “under” bets on players on a two-way or 10-day contract. 

That was the direct result of the Jontay Porter saga. Porter was banned for life by Silver last year after it was found he “disclosed confidential information to sports bettors, limiting his own participation in one or more games for betting purposes, and betting on NBA games.”

During the Sportradar Investor Day on April 1, Silver spoke of the “far too complex,” “somewhat Byzantine” and “fairly primitive on the front end” nature of sports betting, while adding the terminology commonly used is “not simple to follow.” 

He said the average NBA wager is $5. Silver foresees a day when people “can bet a narrative in AI” by simply describing a potential outcome or outcomes and have a book create real-time odds to accommodate it.

What Silver Has To Say About Sports Betting:

Silver offered a lengthy answer to bookies.com on Monday at NBA Headquarters when asked about the league’s perception and relationship with both fans who bet and the books at which they wager. 

Here are some excerpts of Silver’s answer to Bookies.Com:

‘Enormous amount of sports betting regardless of its legality’

SILVER: “We believe that there is going to be an enormous amount of sports betting regardless of its legality in the United States, and we're better off with a legalized framework for sports betting as opposed to illegal. I happened to read the other day that New York state leads in (legal) sports betting nationally, but New York State also leads in illegal sports betting. So (sports betting) has been part of our culture for a long time and, ultimately, from a league standpoint, we need to the extent there is, a regulatory framework. And there's transparency that we will be in the best position monitor and step in as you saw in the Jontay Porter situation, when there's behavior that is either illegal or violative of NBA rules.”

‘Advocating a federal framework for sports betting.’

SILVER: “This gets lost sometimes that while I wrote an op-ed piece in 2014 advocating a federal framework for sports betting. Now we're dealing with state-by-state. Mine was a framework that would allow the NBA to have a seat at the table in terms of how that regulatory framework would work. What ended up happening is after the Supreme Court decision, in essence, the states and the betting operators got together and said: ‘Here's how it's going to work.’ As some of you may recall, we were advocating for an integrity fee. We advocated for other rules, only a small percentage of which were ultimately adopted. We are not a direct participant in the regulatory framework state-by-state. We're in many ways left to our own devices. We all the other leagues and are dealing with now essentially (39) different jurisdictions and the rules that they may impose on us or the integrity issues that presents. I would prefer a consistent national framework, and if there was a consistent national framework, there is a segment of prop betting that if it were up to us, we wouldn't allow, because just as we saw in the Jontay Porter situation, I think particularly with two-way players and some of the prop bets, it creates more opportunity for inappropriate behavior.”

‘Head's not in the sand on problematic gambling’

SILVER: “My head's not in the sand on problematic gambling. I think that should be a concern for all of us. That there are people who we know are going to have issues with sports betting regardless of its legality. But I also recognize that it must be the case that if there's constant promotion for sports betting, there is some other category of bettor who will be pulled into sports betting who might not otherwise have participated . . . And at least for those people that choose to do it legally, if they do have problems they tend to get detected quickly. And I don't mean the case here problems in terms of inside information or anything else, but if they are betting over their heads, that algorithms are pretty sophisticated in terms of monitoring how people bet, and when there's aberrational behavior, and check-ins with people, to see if they have the means to continue betting the way they are. So far from perfect, I would prefer to be more heavily regulated, but it's something we're keeping an eye on because we want at the end of the day for people who choose to engage with our le that way to be able to better within their means and to have a positive experience from betting.”