The prediction market company Kalshi has sparked significant controversy with its proposal to allow betting on whether NCAA Division I athletes will enter the transfer portal. This development, announced on December 17, 2025, has drawn sharp criticism from the NCAA, which questions the legality of such markets and their potential impact on student-athletes and the integrity of college sports.
Kalshi submitted filings to the Commodity Futures Trading Commission (CFTC) proposing contracts that would resolve around player decisions, including “Will [player] enter/withdraw from the transfer portal in [time period]?” and “Will [player] transfer to [team] in [time period]?” The contracts would settle based on public announcements from players, agents, or sports media, even if a player later changes their mind about entering the portal. The backlash was immediate, with NCAA President Charlie Baker calling the proposal “unacceptable.” He emphasized that such betting could further pressure student-athletes, who already face harassment tied to betting outcomes.
This controversy comes at a challenging time for Kalshi. In an earlier ruling, a federal court in Nevada had allowed the company to continue offering sports event contracts. However, a November 2025 ruling from Judge Gordon overturned that decision, stating that Kalshi’s interpretation of the Commodities Exchange Act (CEA) was flawed and would disrupt the regulatory landscape. This ruling shifts Kalshi’s position from appellee to appellant in ongoing federal appellate cases, complicating the company’s legal standing.
The legal implications of Kalshi’s proposal extend beyond regulatory concerns. Critics argue that betting on transfer portal decisions differs fundamentally from traditional sports wagering. Unlike game outcomes, transfer decisions are influenced by various individuals privy to nonpublic information, raising concerns about potential manipulation. Kalshi’s own filings acknowledge this risk, detailing extensive trading prohibitions that cover athletes, coaches, and others associated with the university.
Furthermore, the recent changes in college athletics contracts, effective from July 2025, have created additional complexities. Many athletes are now bound by contracts with their universities, and questions arise regarding the potential for tortious interference should a player’s involvement in a prediction market come to light. Universities could initiate pre-litigation actions against Kalshi if a player is listed on a prediction market, complicating the legal landscape further.
Kalshi’s recent filings also reflect a broader strategy of pushing regulatory boundaries. Following Judge Gordon’s ruling, the company had expanded its offerings, including markets for prop bets, which it had previously suggested would be inappropriate. Although Kalshi stated it has “no immediate plans to list these contracts,” it stopped short of abandoning the concept entirely and highlighted that competitors already offer similar markets.
Despite the public outcry, the existence and expansion of transfer portal betting markets appear to be facing minimal regulatory scrutiny. The NCAA and its critics argue that the potential impacts on student-athletes’ welfare and competitive integrity cannot be overlooked. The ongoing controversy surrounding transfer portal betting may ultimately prompt policymakers to take a more comprehensive look at the regulation of prediction markets in college sports.
As the industry evolves, the debate raises critical questions about student-athlete protection, the integrity of competitions, and the regulatory frameworks governing these emerging markets. The outcome of Kalshi’s legal challenges and the response from regulators will likely shape the future of prediction markets in college athletics.
