There’s nothing like football to reopen old wounds.
Yes, the college football season is nigh, and that is usually a happy time for both bettors and fans. However, for state gambling regulators, it may just be another reminder of their ongoing frustration with prediction markets and the legal battles surrounding them.
- College football season could rekindle the fight between states and prediction markets over sports event contracts, especially where states restrict college betting.
- Recent CFTC filings suggest prediction markets could offer college player prop-style contracts, even in states where sportsbooks are barred from offering those types of products.
- The NCAA and state regulators are pushing back, and legal battles continue over whether federal prediction markets are beyond state gambling laws.
Prediction markets are federally regulated exchanges that operate in nearly all U.S. states, including ones that have not legalized sports betting. Since late 2024, they have offered sports-related event contracts that allow users to buy and sell "yes" or "no" contracts on certain outcomes, which some states view as sports betting by another name.
A legal battle royale has broken out, with states, prediction market operators, and the federal regulator, the Commodity Futures Trading Commission (CFTC), all scrapping over regulatory turf and the legality of sports event contracts. Forty-four states even urged the CFTC this summer to “clarify that sports bets and gambling cannot be traded” on prediction markets and are instead subject to state law.
Here is the conclusion of 44 states in their submission to the CFTC on the agency's proposed prediction market rules.
— Geoff Zochodne (@GeoffZochodne) July 28, 2026
In short, you can't do it, the rules are "in tension with the Constitution," and you should start over by saying sports betting is exclusively state turf. pic.twitter.com/qba65lDWe8
Perhaps compounding the concern, prediction markets offer certain trading opportunities in states that have legalized sports betting but restricted certain options.
These opportunities could involve betting on colleges in states that do not permit state-regulated sportsbooks to take bets on in-state colleges (i.e. in Virginia, the state's sportsbooks can't take bets on Virginia Tech). It could also include college player props where those are typically forbidden.
“I do think you're going to start seeing collegiate prop-type bets in prediction markets come this fall,” said Scott Ward, an attorney appearing on behalf of the Sports Betting Alliance (SBA), during an Indiana Gaming Commission (IGC) meeting in June.
Some filings by prediction market operators also suggest as much.
In June, for instance, Kalshi (the leader among prediction markets in the U.S. regulated market) self-certified a “Will <entity> record the most <stat> among all members of <football category> in <time period> of <game>?” contract.
The filing suggests that an “entity” for this contract could include an NCAA football player, and the “stat” could be one of several, such as passing yards.
Prop betting is in the eye of the beholder
Kalshi spokespeople did not respond to questions from Covers before this article was published. Still, some state sports betting regulators might look at Kalshi's filing and see a potential player prop. Seeing such contracts in states that forbid college player props could trigger even more concern.
In short, then, the kickoff of the college football season could reinvigorate the whole fracas over the trading of sports event contracts. While there is a prediction market boom looming for the NFL season, college football could prompt unique concerns.
To many states, including those that have not legalized sports betting, the trading of sports-related event contracts is just sports betting. So they may be opposed to sports prediction markets, full stop. And, in certain states, prediction markets may go above and beyond the sort of sports betting that lawmakers and regulators are usually fine with. So they could be doubly mad.
Take, as another example, the Aug. 29 matchup between New Mexico State and Florida State in Tallahassee. It’s not exactly a marquee rivalry game, but, when it comes to gambling, it’s a potentially problematic one.
You'd likely see strong interest in this game in the home states of the two schools. And both of those states have strict sports betting regimes.
New Mexico has not legalized statewide online sports wagering, only wagering that can be done at Native American casinos. Florida sports betting is only authorized via the state’s Seminole Tribe, either in-person at a casino or via the Hard Rock Bet app, and no college player props are permitted.
Hypothetically, then, a prediction market operator could facilitate de facto wagering that takes place off of tribal lands in New Mexico and away from Hard Rock Bet in Florida. They could also offer contracts in Florida tied to player performance.
NCAA urges federal agency to suspend college sport prediction markets. https://t.co/TAheMTwXhw
— NCAA News (@NCAA_PR) January 14, 2026
This could irk some people in those states (especially in New Mexico, where there is already prediction market-related litigation). It could also irk the National Collegiate Athletic Association, which has been trying to crack down on college player prop betting.
The IGC meeting in June was to ponder whether to ban college player props in the state, which legalized sports betting in 2019. Indiana prohibits in-game college player prop betting but not pregame wagering.
An NCAA official noted during the June meeting that 19 U.S. jurisdictions to legalize sports betting have moved to ban college player props. If a ban is approved at an IGC meeting next month, Indiana could become another. Even then, though, prediction markets would still be present in the state. College player prop bettors could just migrate their action to the exchanges.
The NCAA's submission to the CFTC on the agency's proposed prediction market rules includes a request to ban "individual student-athlete event contracts."
— Geoff Zochodne (@GeoffZochodne) July 28, 2026
In other words, no college player props via PMs, an ask the NCAA has made of state-regulated sportsbooks as well. pic.twitter.com/GpfQS3mz8n
The NCAA is seeking a nationwide solution. In July, the organization wrote to the CFTC, asking it to “expressly prohibit” event contracts tied to individual student-athletes, highlighting important differences in the concerns regarding NFL and NCAA player props.
“Student-athletes are a distinctively vulnerable athletic population,” the NCAA said. “In contrast to professional athletes, they are far more accessible to other students and members of the public. They likely have classmates participating in sports prediction markets and in sports betting, which has been shown to be more addictive for college-aged individuals.”
So, any prop-like prediction markets involving individual college players could go against the wishes of both a state and the NCAA. And, in certain states, event contracts tied to an entire college football game will still go against the wishes of both lawmakers and voters.
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I told you once and I told you twice
On Sept. 3, UMass will play Rutgers in New Jersey, which has a robust sports betting scene but a ban on betting on in-state colleges and college games taking place in the state.
New Jersey has tried to push out prediction markets. In particular, it doesn’t want sports event contracts traded on games involving New Jersey schools.
This is because New Jersey did not authorize in-state college wagering before legal sports betting began there in 2018. A majority of New Jersey voters then rejected a proposed constitutional amendment to allow that type of betting in 2021.
New Jersey’s most likely dim view of any in-state prediction market activity involving the upcoming Rutgers game was highlighted in an appeals court decision earlier this year.
The federal judgment noted that New Jersey gambling officials sent a cease-and-desist letter to Kalshi in early 2025 that claimed the operator’s sports event contracts violated “New Jersey’s constitution and gambling laws that prohibit betting on collegiate sports.”
Kalshi contended that complying with New Jersey law would mean excluding the state from contracts it offers in other states and therefore violate a CFTC requirement to provide “impartial access” to its markets.
Are you ready for some football-related outrage?
Ultimately, two of three judges on the U.S. Court of Appeals for the Third Circuit found that Kalshi had “demonstrated a reasonable chance of success” in arguing that the federal Commodity Exchange Act preempts state law. As a result, the show goes on for the operator in the Garden State.
The decision is still poised to be appealed to the U.S. Supreme Court. And, in the meantime, any action facilitated by prediction markets in New Jersey could grate on state regulators. Other states have similar restrictions on betting in-state colleges, such as Illinois, New York, and Virginia.
All of the above suggests there are levels to the concerns and outrage that could be triggered by the start of the college football season.
There’s a baseline of states that don’t believe there should be sports-related prediction markets at all, and then additional concerns that could be prompted by trading that involves certain states’ colleges or player props. Prediction markets, meanwhile, continue to exist and are poised to offer what could be normally forbidden wagering opportunities in certain states.
The conditions are ripe, then, for a college football season that will have drama on the field. However, there could also be drama in both the courtroom and the court of public opinion between states and prediction market operators.
