The prediction market industry has turned its focus toward college sports, with Kalshi recently notifying the Commodity Futures Trading Commission (CFTC) of its plans to self-certify markets concerning NCAA Division I athletes entering the transfer portal. This initiative has drawn strong criticism from the NCAA, which raises significant concerns regarding the legality of such offerings and their potential impact on student-athletes and the integrity of competition.
On December 17, 2025, Kalshi filed contracts with the CFTC seeking to establish wagers on whether specific players would enter or withdraw from the transfer portal within designated time frames. These contracts would resolve based on public announcements from players via social media, athletic departments, agents, or major sports media outlets. Notably, a contract could settle as “yes” even if a player later decided against entering the portal, raising alarms about the ethics of such betting.
NCAA President Charlie Baker quickly condemned the proposal, calling it unacceptable. He pointed out that student-athletes already endure harassment related to betting on their game performances. Baker stressed that introducing transfer portal betting would intensify pressure on these athletes and jeopardize competition integrity and recruiting efforts. He criticized prediction markets for existing in an unregulated environment, amplifying concerns about their influence on college sports.
Kalshi’s recent filing came at a critical juncture for the company. Supporters of prediction markets had gained momentum following an April 2025 preliminary injunction from a federal court in Nevada, allowing the company to continue offering sports event contracts. This temporary victory was tempered by a less favorable ruling in Maryland, creating a complex legal landscape for Kalshi.
In late November 2025, Judge Gordon reversed his stance in the Nevada case, stating that Kalshi’s interpretation of the Commodities Exchange Act (CEA) was strained and aimed at evading state regulations. The judge lifted the temporary injunction protecting the company from Nevada’s regulators, leaving it exposed to enforcement actions while pursuing appeals in multiple jurisdictions.
The judge’s ruling signifies a substantial shift in the legal framework, altering Kalshi’s status from appellee to appellant in ongoing federal reviews. He concluded that Kalshi’s approach could impose CFTC jurisdiction over all sports betting nationwide, thereby disrupting established federalism in gaming regulation and contradicting Congressional intent.
Critics emphasize that betting on the transfer portal differs fundamentally from traditional sports wagering. While game outcomes are determined by athletic performance, transfer decisions often involve individuals privy to nonpublic information prior to public announcements. Kalshi’s filings recognize this concern by detailing extensive trading prohibitions for athletes, coaches, agents, and others with access to sensitive information.
The risks of manipulation in transfer portal betting raise ethical questions distinct from traditional wagering. As many college athletes are now bound by contracts with their universities due to a settlement that took effect in July 2025, the implications of Kalshi’s markets could lead to claims of tortious interference if universities perceive that their contracted players are involved in prediction markets.
Kalshi’s approach reflects a broader strategy to push regulatory boundaries. Judge Gordon noted that following the preliminary injunction, Kalshi expanded its offerings to include various betting styles, contrary to its earlier claims about their appropriateness. While Kalshi stated it has “no immediate plans” to list transfer portal contracts, it did not dismiss the concept entirely, highlighting that similar markets already exist through competitors.
Despite the public outcry, the landscape for transfer portal-based gambling markets appears largely unregulated. This situation prompts critical discussions regarding the adequacy of existing regulations, the integrity of competition, and the welfare of student-athletes. The controversy surrounding transfer portal betting could be a pivotal moment, compelling federal and state policymakers to confront the prediction market industry’s expansion beyond fragmented regulatory responses.
