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Last month, Arizona revoked Underdog's DFS license due to its ties to prediction market platforms. DraftKings rolled out its CFTC-regulated platform in 38 states, while Kalshi backed off controversial NCAA contracts amid outrage. The NFL and the Indian Gaming Association escalated pressure on Congress to rein in sports-related event contracts, citing integrity risks, a lack of consumer protection, and tribal sovereignty concerns.
TL;DR: A Bite-sized Overview
- DraftKings launches DraftKings Predictions: CFTC-regulated app in 38 states with sports and non-sports contracts.
- Arizona revokes Underdog's DFS license: First permit loss tied to Crypto.com prediction market partnership.
- Kalshi cancels NCAA transfer portal markets: Pulls self-certified contracts after NCAA backlash over athlete harassment risks.
- NFL urges Congress to restrict sports prediction contracts: Testimony calls for CFTC guardrails to protect game integrity.
- Indian Gaming Association demands action: Warns that prediction markets threaten tribal sovereignty and IGRA protections.
DraftKings Launches CFTC-Regulated Prediction Market Platform in 38 States
DraftKings Predictions was launched in December, a standalone prediction market app approved by the CFTC. It’s a state-of-the-art platform built on the acquisition of Railbird Technologies, which DraftKings completed in the summer of 2025.
Sports contracts cover NFL, NBA, NHL, college football, and basketball; non-sports include crypto, economic indicators, commodities, and stocks, with entertainment and culture-related contracts planned for the future. Responsible Trading tools include deposit limits, cool-off periods, and self-exclusion, not unlike responsible gambling frameworks offered in real money gambling sites.
The new product runs through a separate subsidiary from DraftKings' legacy products, separate from the online sportsbook, online casino, and daily fantasy apps.
Arizona Revokes Underdog's Fantasy Sports License Over Prediction Markets
Arizona’s Department of Gaming (ADG) revoked Underdog’s daily fantasy sports license last month, marking the first known case of a DFS or sportsbook operator losing a state permit due to offering prediction market services.
The ADG deemed that Underdog’s role as a technology provider to Crypto.com, a CFTC-regulated platform offering sports event contracts, makes Underdog guilty by association, for aiding and abetting Crypto.com, despite the fact that Underdog Predict doesn’t accept users from Arizona.
Underdog’s role as a technology provider for Crypto.com, a CFTC-regulated platform offering sports event contracts, the ADG deems illegal sports betting in Arizona. Although Underdog Predict blocks Arizona access to those contracts, regulators argued the partnership “aids and abets” Crypto.com’s activity and provides a “façade of legitimacy,” violating A.R.S. §5-1209(A)(2) and (12).
Other platforms, such as Fanatics and PrizePicks, may be at risk, while DraftKings and FanDuel are at lower risk because they avoid all associations with sports-event contracts in licensed states.
In association with this, Crypto.com stopped offering event contracts in Arizona, along with seven other states.
Kalshi Backs Away from NCAA Transfer Portal Markets After Backlash
Instead of pushing the NCAA's boundaries, and indeed their patience, Kalshi cancelled plans to offer sports event contracts based on NCAA transfer portal decisions. The plans drew criticism from the NCAA, which is regularly debating restraints on college sports betting due to the sensitive nature of youth athletes and their natural separation from professional sports such as the NBA, NFL, MLB, and NHL.
The cancellation came at the last minute, on the 16th of December, with a planned launch the day after, on the 17th. The event contracts would allow users to bet on whether specific student-athletes would enter or exit the transfer portal within set timewindows. Market settlements (resolutions) would depend on the official NCAA data, school announcements, official social media, and media reports.
NCAA President Charlie Baker called the idea “absolutely unacceptable,” saying it would expose college players to harassment along the lines of how they are targeted through sportsbooks offering player performance bets. As of late 2025, Baker has been on a crusade, rallying for federal protection against potential harms and integrity issues arising not just from prediction market platforms but also from sports betting sites.
NFL Raises Concerns to Congress Over Growth of Prediction Markets
Another sports organization came out against prediction markets last month, as the NFL left a written testimony urging Congress and the CFTC to restrict sports-related event contracts (full PDF) offered by platforms like Polymarket and Kalshi.
In the testimony, Executive Vice President of the NFL, Jeff Miller, stated that these services threaten game integrity and lack adequate consumer protections. He also highlighted that prediction market platforms operate nationwide in all 50 states, whereas regulated sports betting is legal in only 39 states, plus the District of Columbia. He criticized the absence of state oversight, limits, and league input on wagers, including objectionable event contracts tied to officiating phrases or safety announcements during broadcasts.
“We would welcome the opportunity to work with the House Agriculture Committee and the CFTC to understand whether the game integrity safeguards that exist in regulated sports betting markets can be effectively implemented on self-regulated exchanges under the regulatory purview of the CFTC. Until such time that professional sports leagues and fans can be certain that effective game integrity and consumer protection measures can be enforced, sports-related events contracts should not be approved by the CFTC and Congress should consider clarifying the definition of “gaming” contracts in the prohibited categories of the Commodity Exchange Act.”
Jeff Miller, CFTC Reauthorization: Stakeholder Perspectives
Meanwhile, as late as October 2025, the NHL entered a multi-year partnership with Kalshi, highlighting the fractured landscape and general chaos currently engulfing prediction markets in the United States. From my point of view, it’s perfectly clear that greater oversight and stricter regulations are needed to better align sports event contracts with regular online sports betting.
Indian Gaming Association Urges Congress to Act on Prediction Market Betting
On the heels of the NCAA and the NFL, the Indian Gaming Association (IGA) issued a statement last month, also calling on Congress for restrictions on sports-related event contracts. The IGA argues that these services constitute illegal sports betting and should be treated as such, and that they threaten tribal sovereignty and violate the integrity of the Indian Gaming Regulatory Act (IGRA).
IGA Chairman David Z. Bean said tribes invest over $450 million annually in regulatory oversight and employ 6,000+ regulators to prevent fraud, underage gambling, and problem gambling. Critical safeguards that are absent in CFTC-regulated prediction markets. The current state of prediction markets in the US is threatening the economic lifeline of more than 240 tribal governments across the country, which, in turn, provide critical infrastructure and basic services for Indian tribes.