The governing body of College Athletics is sensitive to the appearance of a relationship between itself and Kalshi, which is not classified as a betting service but allows users to predict and profit from outcomes.
What is the NCAA’s complaint?
In the letter – shared by several reporters on social media – NCAA Senior Vice President and Chief Legal Officer Scott Bearby asked Kalshi to change the phrase “Result verified by NCAA” to “Result sourced from NCAA.com,” citing concerns that the original wording implied a partnership.
Bearby also asked about Kalshi’s position on prop betting and whether he would consider banning such markets or cooperating with NCAA investigations.
Sports gambling analyst Dustin Gouker said the letter marks a grudging admission that the prediction markets are not going anywhere.
“They are trying to prepare for the world where the prediction markets are here and will continue to be,” Gouker said. “The NCAA probably doesn’t like the fact that prediction markets exist. They can’t sit here and say, ‘This is bad, this is bad,’ because they can’t stop it. So they’re preparing for a world where ‘we may not like this, but we have to deal with the reality that is here.'”
In a statement to The Athleticssaid a spokesperson for Kalshi: “Kalshi has strong market integrity provisions because we are a federally licensed financial exchange. We appreciate the NCAA’s feedback and are working to adjust the language on our site. We are currently reviewing and addressing their additional requests.”
What is Kalshi?
Kalshi is a federally regulated prediction market, operating under the Commodity Futures Trading Commission (CFTC). Unlike sportsbooks like FanDuel, DraftKings or BetMGM – which are regulated by state gaming commissions and banned in states like California and Texas – Kalshi is legal nationwide because it is classified as a financial trading platform and not a gambling service.
That distinction has fueled the rapid growth. According to The New York Times, more than $2.5 billion in sports contracts were traded on Kalshi when the NFL season started. The American Gaming Association estimated that online sportsbooks accepted a combined $14 billion in bets in September 2024.
However, its expansion has also attracted a lot of attention. More than thirty attorneys general have issued cease-and-desist letters, stating that Kalshi’s sports markets functionally mirror sports betting and should be regulated as such.
“A state looks at this and says, ‘This is clearly sports betting,’” Gouker said. “You have to have a license to do that. Kalshi (and other prediction trading market services) responded by filing lawsuits to stop the enforcement of these cease and desist letters in several states.”
How Kalshi differs from sportsbooks
When you place a bet on a sporting event through FanDuel, you are betting against FanDuel. The company collects your losses or spends your profits.
However, Kalshi trades contracts from user to user. You bet one side; another person or entity bets on the other. Then the winnings are transferred between you and the other entity – be it an individual or a Kalshi affiliate providing liquidity (providing money to both sides of the bet).
“Kalshi works like the stock market instead of a casino,” Kalshi’s spokesperson said. “In casinos the house always wins. At Kalshi there is no house. We don’t win when our customers lose.”
Kalshi cuts down on service and transaction costs in that process. It doesn’t profit directly from your losses because you’re not betting against it; the company simply raises money by facilitating the contracts.
The company claims it facilitates transactions at ‘events’. An ‘event’ is defined as something that has ‘economic consequences’. Recently, Daniel O’Boyle, a business journalist and editor for the trade publication Casino Reports, has seen this definition expanded to include sports results.
“(Kalshi) initially started offering contracts on things like elections or the unemployment rate,” O’Boyle said. “Something where you would say: ‘Yes, this certainly has an economic consequence.’ Then they expanded into sports, where it becomes a little less clear.”
Under the Biden administration, the CFTC attempted to ban election and sports contracts. But after Donald Trump’s return to office, Kalshi – who played Donald Trump Jr. later appointed as strategic advisor – to offer sports markets during the 2025 NFL playoffs.
“You can have a discussion about how, if this team wins the Super Bowl, they’re going to have a parade, and that has an economic impact on the city,” O’Boyle said.
Concerns about integrity
So far, Kalshi’s offering has been limited to game winner markets, not player props. But some past incidents raise questions.
According to Legal sports reportCoinbase CEO Brian Armstrong recently noted live betting on specific words he might say during a quarterly earnings call. At the end of the call, he deliberately wrote them down, impacting more than $80,000 traded on Kalshi within minutes.
“Things like that make you feel like if something like that can happen on their site, it makes you more wary of the actions they take when it comes to sports,” O’Boyle said.
That is exactly the concern for the NCAA. As Kalshi moves further into the sport, the organization wants to ensure its name is not used in a way that legitimizes or enables unregulated betting. It also hopes to limit betting on players that could further call into question the integrity of the sport.
However, Kalshi is not the only prediction market service: there is also Crypto.com and Polymarket.com. This emerging category may invite the creation of more platforms that explore the boundaries of consumer interest in sports predictions.
“Kalshi’s argument was that everything is tradable,” Gouker said. “’There’s no reason why we should limit what we take with us.’ They may be willing to discuss how far they go with player props, but I don’t think they’ll just say, “we never do player props.” If Kalshi doesn’t do it, maybe someone else can.”
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