As sports betting has grown in popularity, prediction markets have also emerged, allowing people to place bets on a variety of real-world events.
Calhy Prediction Markets made a big splash on Wednesday when it began expanding its service to the college sports transfer portal.
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Ingame.com reports that Kalshi notified the Commodity Futures Trading Commission of its plans to offer forecast contracts on the transfer portal.
The backlash was strong and predictable. Betting on the decisions of individual athletes carries significant risks of misuse of inside information, as those who know what the athletes plan to do can manipulate the system. It also opens up another avenue for harassment and scrutiny of athletes before or after decisions are made.
“N.A.A.A. Strongly opposed “It’s bad enough that student-athletes face harassment and abuse for losing performance, and now Calsey wants to bet on their transfer decisions and status,” NCAA president Charlie Baker said in a statement to ESPN.com’s David Purdum. “This is absolutely unacceptable and will put even more pressure on student-athletes while threatening the integrity of the game and the recruiting process.” . . . Their decisions and futures should not be gambled, especially in an unregulated market that does not follow any of the rules of legal sports betting operators. “
Kalshey appeared to back off in a statement to Purdum after the incident came to attention. (Did Kalsi provide a predictive contract regarding the occurrence of this event?)
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“We’ve been proving markets where we won’t ultimately go public; even though our competitors have those markets, We have no immediate plans List these contracts,” Kalsi said.
This is hardly a commitment not to do it. Hopefully the opposition will be loud enough to prevent Pandora’s box from opening.
Last week, the NFL expressed concerns to Congress about the expansion of prediction markets in sports. If a company like Kalshi is going to offer projected contracts on the transfer portal, what’s stopping them from doing the same with NFL free agents?