NCAA Urges Federal Regulators to Suspend Collegiate Prediction Markets Amid Escalating Integrity Concerns

The NCAA has asked the Commodity Futures Trading Commission (CFTC) to suspend prediction markets tied to college sports. This request comes as federal authorities investigate an expansive college basketball point-shaving scheme involving dozens of Division I athletes across multiple programs—underscoring the NCAA's broader concerns about "the well-being of student-athletes and the integrity of competition"¹at the intersection of wagering products and college sports, and the potential for prediction markets to exacerbate these risks.

Together, these developments signal heightened regulatory, compliance, and enforcement risk for universities, conferences, athletes, sportsbooks, and prediction markets operating in a rapidly evolving—and increasingly scrutinized—sports wagering landscape.

Background

In a January 2026 letter to the CFTC (the "Letter"), NCAA President Charlie Baker urged federal regulators to suspend prediction markets from offering trades on college sports until a comprehensive regulatory framework can be established.

While sportsbooks are largely regulated at the state level, prediction market operators contend that they are distinguishable because, unlike sportsbooks, prediction market users "trade on the yes/no outcome of events . . . and are not going up against the house but instead trading contracts with other users on the opposite side of the proposition."² Based on this distinction, prediction markets, it is argued, fall under the CFTC's jurisdiction as commodities exchanges and as a result generally fall outside state gaming oversight regimes.

The NCAA expressed concern that certain collegiate prediction market offerings increasingly resemble unregulated sports wagering products³ that lack safeguards the NCAA views as critical in the college context, such as age restrictions, advertising limitations, integrity monitoring, prop bet restrictions, and mechanisms to protect student-athletes from harassment or coercion.⁴ For example, prediction market operators have recently sought CFTC approval to offer trades on student-athletes' transfer portal decisions⁵—trades that could be highly susceptible to manipulation and "insider trading," and that the NCAA has warned "would pose catastrophic risks to student-athletes and consumers alike."⁶

While the NCAA emphasized its willingness to engage with regulators on a lasting framework, it argued nonetheless that interim suspension is necessary given the pace of market expansion and the unique vulnerabilities of college athletics.

Recent Gambling Scandal Intensifies Integrity Focus

The NCAA's request to the CFTC comes at a time of heightened scrutiny of college sports gambling. Recently, federal prosecutors brought charges in the Eastern District of Pennsylvania against a group of defendants "accused of orchestrating one of the biggest point-shaving plots in American sports history"—a college basketball game-rigging scheme that "ensnared at least 39 athletes at 17 different schools."⁷ According to reports, the alleged scheme involved relatively modest payments to athletes to influence game outcomes, highlighting how easily collegiate competitions may be susceptible to manipulation.⁸

The scale and simplicity of the alleged misconduct have amplified concerns about integrity safeguards in college sports, particularly as wagering products proliferate and diversify. These developments provide additional context for the NCAA's position that expanded betting-adjacent products pose heightened risks in the collegiate environment, where the benefits of the pay-for-play revolution have not been enjoyed equally across Division I student-athletes and "the gap between the haves and have-nots is the widest it has ever been."⁹

Practical Considerations for Stakeholders

The Letter reflects growing concerns that existing regulatory frameworks may not adequately address integrity risks specific to college sports. Practical considerations include:

• Universities and Conferences. Universities and conferences should continue to strengthen internal controls related to sports wagering, such as offering regular training of student-athletes and coaches; including duties to report and to cooperate in NIL contracts; updating applicable policies (particularly those regarding the sharing of confidential information); and implementing integrity monitoring protocols. Universities should also consider how emerging wagering products—including prediction markets—may implicate existing policies and risk assessments, particularly in light of recent enforcement and investigative activity, and update those policies and risk assessments accordingly. 
• Gaming and Market Operators. Operators offering or considering collegiate prediction markets should prepare for heightened regulatory scrutiny, including calls for product limitations, enhanced safeguards, or suspension of certain offerings. Ongoing coordination with counsel on evolving regulatory expectations will be critical.
• Compliance and Risk Teams. Compliance functions across relevant stakeholders should monitor developments at both the federal and state levels; assess exposure arising from betting-adjacent activity; and be prepared for increased scrutiny related to integrity failures. Recent events underscore the importance of proactive risk assessment rather than reliance on regulatory gaps or jurisdictional distinctions.
• Players. As collegiate athletes continue to be vulnerable targets to overtures from collegiate sports bettors—particularly in programs where NIL money may be scarce—it is critical that athletes report those overtures to their coaches or other school officials. Failure to do so, even where the athlete has declined the bettors' solicitation, could create suspicion should the athlete happen to underperform in a game that makes or breaks the odds.

Conclusion

Steptoe's industry-leading Sports Integrity Team is monitoring these and related developments. Our team routinely advises clients in the collegiate sports, sports betting, and prediction market spaces on navigating these evolving compliance and enforcement risks. Check back here for relevant updates.

¹ Letter from Charlie Baker, President, NCAA, to Michael S. Selig, Chairman, CFTC (Jan. 14, 2026) https://ncaaorg.s3.amazonaws.com/ncaa/wagering/2026NCAA_CFTCLetter.pdf (the "Letter") at 1.

² David Purdum, NCAA asks regulators to suspend collegiate prediction markets, ESPN (Jan. 14, 2026) https://www.espn.com/college-sports/story/_/id/47614688/ncaa-asks-regulators-suspend-collegiate-prediction-markets (last visited Jan. 27, 2026).

³ Letter at 1 ("Sports wagering is broadly defined as individuals wagering money on the outcome of sporting events or any portion thereof. Under that definition, sport prediction markets act like sports wagering. Prediction market operators are offering collegiate sport moneyline, total and spread markets that mirror markets offered by sports wagering operators. Recently, large sports wagering and daily fantasy operators have announced their entry into the prediction marketplace.").

⁴ Id. at 1–2.

⁵ David Purdum, Prediction market Kalshi self-certifies transfer portal trading, ESPN (Dec. 17, 2025) https://www.espn.com/college-football/story/_/id/47341610/prediction-market-kalshi-intends-offer-trading-portal (last visited Jan. 27, 2026)

⁶ Letter at 1.

⁷ Jared Diamond and Louise Radnofsky, The Easiest Play in College Basketball: Rigging Games for Gamblers, Wall St. J. (Jan. 27, 2026) https://www.wsj.com/sports/basketball/college-basketball-gambling-scandal-407ed3b6?mod=hp_lead_pos11 (last visited Jan. 27, 2026).

⁸ See id. ("Leagues and gambling operators have insisted that . . . today's players earn too much money to risk their careers for whatever extra they could make by shaving points. . . .  But the reality is that there are more than 350 teams in D-I. And the overwhelming majority do not have access to the millions on offer at powerhouses. . . .  In most cases, the payments to participate in the point-shaving scheme were less than the value of one year of their basketball scholarships. For players making little or no actual money, it was enough.").

⁹ Id.