Megan McCarty Carino

And after the first game, the bettors cashed in, becoming the biggest money winners for NBA bets on DraftKings that day.

Which was very suspicious, says Matthew Holt, former head of a company that scours betting data for signs of fraud.

Sportsbooks flagged the weird bets, Holt's company investigated, and sent out a system-wide alarm.

All states that allow sports betting require operators like DraftKings to share real-time data with these independent integrity monitors, which also screen out players and other insiders who aren't allowed to bet.

Suspicious activity must be reported to sports leagues and regulators.

And now the NBA restricts bets on the performance of lower paid players like Jonte Porter.

Prediction markets have been operating without the multiple layers of oversight that helped bring Jonte Porter's cheating to light.

And the Commodities Futures Trading Commission doesn't have experience policing that kind of activity, says Ben Schifrin at the nonprofit Better Markets.

Now it's charged with ensuring integrity not only in sports, but domains with much higher stakes.

Controversy has erupted in recent months over prediction market bets involving conflict in Iran, Ukraine and Venezuela.

The platforms refunded some wagers but paid others out.

Last month, Israeli authorities arrested two people accused of using classified military information to profit on PolyMarket.

Now, the CFTC is asking the public to weigh in on whether that kind of thing should be banned, whether government officials should be allowed to trade, or what constitutes non-public information.

John Holden is a professor of business law and ethics at Indiana University.

He says the industry does have a business incentive to avoid scandals.

In its guidance yesterday, the CFTC encouraged prediction markets to coordinate more closely with sports leagues and integrity monitors and to avoid listing contracts that could be easily manipulated by the actions of a single person.

But for now, they're basically suggestions.

But there are also mounting pressures to avoid the appearance of similarities with legal sports betting, which could help make the case in court that they are one and the same.

I'm Megan McCarty Carino for Marketplace.

Thank you.