The NCAA, the governing body of collegiate athletics, released a statement on Thursday expressing its concern with the rise of prediction platforms.
Key Takeaways
- Robinhood announced earlier this week it would offer college football contract markets.
- Prediction platforms like Robinhood don’t have to comply with state gaming regulators.
- Kalshi recently lost a lawsuit in Maryland, allowing the state regulator to impose a cease-and-desist.
One of the most popular prediction platforms, Robinhood, announced earlier this week the coming launch of college football and NFL contract markets. Contracts would be available for every week during the regular season and playoffs.
“Sport integrity is paramount for the NCAA, and we are deeply concerned by unregulated and unprotected markets that pose a threat to competition integrity and student-athlete safety,” NCAA senior vice president of external affairs Tim Buckley said in a statement shared by ESPN’s David Purdum.
“We will continue to analyze developments of this market and work with industry leaders to help ensure guardrails and regulations to protect NCAA competition, student-athletes, coaches and officials.”
Prediction platforms are not like traditional sports betting sites, whose odds are set by the house. Instead, consumers’ demands influence the price of contracts at prediction platforms, meaning that their odds are an ever-changing representation of the public atmosphere.
However, unlike licensed sportsbooks that report to local regulators, prediction outlets are not held to state standards.
NCAA’s new approach to sports betting
The NCAA has been proactive in monitoring the impact sports betting has had on college sports.
NCAA president Charlie Baker spent the last couple of years campaigning for state regulators to remove college player props from the catalog of available betting markets due to their potential for nefarious interference and an increase in harassment.
The organization also last year rolled out an updated set of punishments for student-athletes found guilty of participating in illegal sports betting. Participants in competitions that it governs may not bet on professional or amateur sports at any level.
The punishments varied by the amount of money wagered, with possibilities including:
- $200 or less wagered: sports wagering rules and prevention education
- $201-500: loss 10% eligibility for one season, plus education
- $501-800: Loss of 20% eligibility for one season, plus education
- $801+: Loss of at least 30% eligibility for one season, plus education
Oklahoma quarterback and Heisman candidate John Mateer was the latest star athlete to find himself in hot water for alleged sports betting after transactions on his Venmo account titled “Sports gambling” and “Sports gambling - UCLA vs. USC.”
He denied any wrongdoing, and no charges have been brought against him.
Prediction platforms create questions
The NCAA isn’t the only organization to cast skepticism in the direction of prediction market platforms. Numerous state regulators wrote the Commodities Futures Trading Commission (CFTC), the body in charge of licensing and overseeing prediction platforms, expressing their concerns with the platforms’ rise.
“[Arizona] does not accept the idea that for years states have blindly passed legislation and regulated event wagering without knowing that Congress secretly upended its historical approach to gambling in the Commodities Exchange Act,” Arizona Department of Gaming (ADG) director Jackie Johnson wrote in a letter to the CFTC.
Despite that, prediction platforms gained a significant boost when Kalshi won a lawsuit against New Jersey’s gaming regulator. The platform was granted a temporary restraining order against the regulator, which had issued a cease-and-desist order.
However, on Aug. 1, U.S. District Court Judge Adam B. Abelson denied Kalshi’s motion seeking a preliminary injunction against Maryland’s gaming regulator, allowing the latter to enforce a cease-and-desist order.
