While sports betting’s rampancy since being legalized in May 2018 has been a controversy lightning rod in the past seven-plus years, another player is emerging that is further muddying the waters: Prediction markets.
Predictions markets – exchanges such as Polymarket and Kalshi that allow bets on event outcomes – have come with less regulation than sports gambling. The latter has drawn the attention of the NCAA after Kalshi notified a federal agency on Wednesday, Dec. 17, it is self-certifying on whether college athletes are going to hit the transfer portal. NCAA president Charlie Baker took aim at the decision, saying in a statement:
‘The NCAA vehemently opposes college sports prediction markets. It is already bad enough that student-athletes face harassment and abuse for lost bets on game performance, and now Kalshi wants to offer bets on their transfer decisions and status. This is absolutely unacceptable and would place even greater pressure on student-athletes while threatening competition integrity and recruiting processes.
‘Their decisions and future should not be gambled with, especially in an unregulated marketplace that does not follow any rules of legitimate sports betting operators.’
Last week the NFL also took aim at prediction markets getting involved in a testimony to Congress.
‘We are particularly troubled that several sports-related futures contracts have been launched nationwide, including in jurisdictions where sports betting has not been legalized,’ wrote Jeff Miller, an executive vice president of the NFL, in the testimony, reported by Dustin Gouker. ‘These contracts fall outside the purview of state regulatory authorities and the safeguards they impose upon the industry.’
Other leagues have embraced the prediction market companies, with the NHL and UFC partnering with these types of companies.
Per a spokesperson, Kalshi said: ‘We certify markets all the time that we do not end up listing,’ according to ESPN. But CEO Tarek Mansour has said Kalshi’s ultimate goal is to ‘financialize everything and create a tradable asset out of any difference in opinion.’
The company filed a lawsuit against regulators in Connecticut in early December for the assertion from Connecticut officials that ‘a prediction market wager is not an investment,’ becoming the most recent of a series of legal battles the company is embroiled in.