The NCAA sent a letter to Kalshi, a company that offers prediction markets on college basketball and football, expressing its concern about the company’s “commitment to contest integrity and the protection of contest participants,” according to a copy of the letter obtained by ESPN.
In the letter, dated Oct. 30, NCAA chief legal officer Scott Bearby asked Kalshi how it monitors collegiate sports markets for integrity concerns and activity by prohibited customers, who it considers a prohibited customer, whether it will report integrity concerns to the NCAA and whether the company will cooperate with NCAA investigations.
“We welcome Kalshi’s stance on its efforts to protect the integrity of NCAA competitions and to reduce instances of abuse and harassment directed at student-athletes and other participants,” Bearby wrote.
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The NCAA also asked if Kalshi would ban prediction markets similar to prop bets, which the company began offering this fall.
Prop betting markets, Bearby noted in the letter, heighten “the risk of integrity and harassment concerns.” In March last year, NCAA president Charlie Baker called for a ban on prop bets on college athletes in states with legal sports wagering.
The NCAA also asked Kalshi in the letter to review language on its website that the NCAA says implies a relationship between them.
“Kalshi has robust market integrity provisions required by our status as a federally licensed financial exchange,” a Kalshi spokesperson said in a statement to ESPN. “We value the NCAA’s feedback and are working on adjusting the language on our site. We are currently reviewing and addressing their additional requests.”
Prediction markets like Kalshi have emerged over the past year and are competing with traditional sportsbooks in the betting market. Kalshi is battling multiple lawsuits by state gambling regulators, who allege that the company is violating state laws by offering event contracts that mimic sports bets. Kalshi argues that it does not fall under state jurisdiction and is instead regulated by the Commodity Futures Trading Commission, a federal agency.
In March, Kalshi announced a partnership with IC360, an integrity monitor used by many collegiate and professional leagues.
The NCAA has faced an increasing number of alleged betting violations by players in recent years. In September, the NCAA announced that a Fresno State men’s basketball player had manipulated his performance for gambling purposes and conspired with two other players in a prop betting scheme. In total, the association has opened investigations into potential betting violations by approximately 30 current or former men’s basketball players.
