In this week’s column, California Sports Lawyer® CEO and Managing Attorney Jeremy M. Evans examines whether prediction markets and sports betting platforms are good partners for sports leagues. The financial benefits are apparent, but these partnerships raise moral and governance questions involving competitive integrity, consumer protection, and public trust. The analysis considers how leagues can profit from wagering businesses while disciplining players and other participants for betting.
Integrity and parity are foundational to sports. Without integrity and parity, sports would feel empty and scripted.
You can read the full column below. (Past columns can be found, here).
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What is it about the human condition that makes enough never enough? Why is it that, after name, image, and likeness (NIL) laws were passed and the National Collegiate Athletic Association (NCAA) changed its rules to allow college athletes to receive compensation from their NIL, college athletics developed revenue sharing systems administered by schools? Why is it that, after the United States Supreme Court held the Professional and Amateur Sports Protection Act of 1992 (PASPA) unconstitutional in Murphy v. NCAA in 2018 and returned authority to the states to decide whether to legalize sports betting, professional sports leagues used the opportunity to broker sponsorship deals?
The easy answer would be that business is business. The next easiest answer would be greed. A third answer might be a lack of foresight.
The question of whether prediction markets and sports betting platforms are good for professional sports leagues, teams, owners, or managers requires a much deeper analysis. Financially, prediction markets and betting platforms can clearly benefit sports organizations. What is good for the goose is good for the gander.
Integrity and parity are foundational to sports. Parity means a reasonable degree of competitive balance among teams or participants. Without integrity and parity, sports would feel empty and scripted. Many fans watch sports year after year because of their love for a team and the hope that their team might win. “This is our year,” a fan might say. On the other hand, sports are a form of entertainment, and this author has often heard fans say, “It is all scripted anyway,” or, “That player definitely took the points to cover.” A point spread is the projected margin of victory used to determine the outcome of certain wagers. Right or wrong, sports betting violations involving athletes and coaches have received substantial media coverage.
A prediction market allows participants to buy and sell contracts whose value depends on the outcome of a future event. A traditional sports betting platform accepts wagers under state gaming laws and establishes odds for possible outcomes. Sports event prediction markets are similar to sports betting from the consumer’s perspective, except that platforms such as Kalshi and Polymarket US operate through designated contract markets rather than solely through sports betting systems licensed by individual states. A designated contract market is an exchange authorized and regulated by the Commodity Futures Trading Commission (CFTC), the federal agency that oversees United States derivatives markets. The legal distinction remains contested because state regulators argue that sports event contracts are sports wagering subject to state gaming laws, and courts have reached different preliminary conclusions. Competition between the two business models can be better for consumers, but is increased access good for habitual bettors or other vulnerable consumers? What protections are prediction markets and betting companies instituting to guard against impropriety on the court and harm in the homes or on the phones of consumers?
The regulatory distinction was previously examined in Owning Probability and Betting Under Federal Oversight. Last week’s column discussed the role of government in decisions and policies involving social media, children, and parents. A similar question arises here. There are also questions of morality, personal responsibility, and the importance of sound policy.
PASPA went too far by prohibiting states from authorizing sports wagering, which violated the anti-commandeering principle of the United States Constitution. The anti-commandeering principle generally prevents the federal government from directing state legislatures to enact or maintain particular laws. The Supreme Court’s decision did not require states to legalize sports betting; it allowed each state to decide whether and how to authorize it. However, is opening every avenue through mobile applications, websites, and physical locations a good idea for prediction markets and sports betting?
Is gambling similar to alcohol regulation, including Prohibition, or is it more like a personal contract in which people choose their own destiny and accept responsibility until someone else is harmed or the contract is breached? Prohibition was the national constitutional ban on the production, transportation, and sale of alcoholic beverages from 1920 until its repeal in 1933. Ideally, laws will establish boundaries for what is allowed and where. Laws should not determine morality alone, but they can establish standards based on public safety and a shared set of moral values.
The model in this world is imperfect, no matter the circumstances. Major League Baseball (MLB) has partnered with Polymarket, and the U.S. Open has partnered with Kalshi. At the same time, sports governing bodies discipline participants for betting, making these developments interesting and ripe for reflection. MLB and the U.S. Open are therefore not merely observing the growth of prediction markets; they are entering commercial relationships with them.
There are similar models in which a team might have a sponsorship with Budweiser while a player who appears at a game intoxicated or is involved in a car crash or arrested for driving under the influence may violate laws and league policies. Such conduct could also affect the player’s performance and the outcome of a game. However, there is a difference between a participant manipulating an outcome connected to a proposition bet or event contract and a participant violating an unrelated law. A proposition bet, commonly called a prop bet, is a wager on a specific event or individual performance within a game rather than solely on the final result.
Intentionality may be important, but arguably more important is the fact that sports may be entertaining, but they are beautiful and loved because they are unscripted. In other words, sports are entertaining but are not entertainment in the traditional sense. Sports betting and prediction markets without adequate oversight can push sports toward entertainment as a construct because the financial product depends on the outcome. This concern was previously discussed in When Betting Becomes the Broadcast, Who Is to Blame—Leagues, Media, or Players?.
Hit King Pete Rose might be smirking right now. Rose later acknowledged betting on the Cincinnati Reds to win while managing the team, but he bet on his own team nonetheless. Major League Baseball removed Rose and other deceased individuals from its permanently ineligible list in May 2025, making him eligible for Hall of Fame consideration but not automatically granting him induction. Does that mean his conduct should continue to keep him out of the Hall of Fame, or should he be treated like athletes who used performance-enhancing drugs? Arguably, removing history is never a good idea, but telling the truth about what happened while noting the accomplishments is human.
The answer likely lies in the space between the free will of individuals, the responsibility of platforms to avoid inducive or deceptive practices, and programs designed to help people who suffer from gambling addiction. Prediction markets and betting companies should carefully consider whether account credits, bonuses, or purportedly free money improperly encourage gambling. Balance is key: encourage free enterprise, protect vulnerable consumers, and preserve the integrity of sports.
These are difficult questions. Policy can provide a path forward. They are nonetheless questions worth discussing and answering.
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About Jeremy M. Evans:
Jeremy M. Evans is the CEO and Managing Attorney at California Sports Lawyer®, representing companies, creators, and talent in transactional matters across entertainment, media, sports, and intellectual property, with a focus on dealmaking. An award-winning attorney and industry leader, Evans is based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.
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