Report: University Of Tennessee Student Fired For Betting On Kalshi
Roundup: Jump Trading gets equity in Kalshi, Polymarket in exchange for liquidity, Bloomberg reports; enforcement lawyers dwindle at the CFTC; DraftKings adds Crypto.com prediction markets.
A student working on the University of Tennessee’s sports broadcast team was fired for betting on a Tennessee football game with Kalshi, according to a new report from Knox News.
Please click through to the whole story if you have a minute…support local journalism! From the piece:
“An NCAA report reveals the University of Tennessee fired a student worker on the sports broadcast team because he bet on a Vols football game through an online app in the 2025 season.
The student worker placed wagers using Kalshi, a wildly popular but controversial app in college sports. …
In October, a student worker employed in UT’s in-house broadcast team placed wagers on NFL, NBA and college football games using the Kalshi app, according to the NCAA report. At least one wager was placed on a Tennessee football game. …
In November, UT was notified about the impermissible wager by ProhiBet…
There’s more good reporting in there. This story is interesting in a lot of ways:
The NCAA has been adamant about the idea that prediction markets are betting platforms. That Kalshi (and presumably others) are being treated like betting platforms in enforcing rules around college athletics is an interesting data point we haven’t encountered previously, to my knowledge. It’s not surprising, of course, but still interesting.
You can see how a student might be confused about whether using Kalshi would be a prohibited activity. Kalshi does not call itself a sports betting app. But then again, I think it should be pretty obvious to the end user — in this case the fired student — that this is something you shouldn’t be doing, if you’ve been told not to bet on Tennessee games.
It’s a pretty good example of integrity monitoring working, even with Kalshi and prediction markets! A person who was supposed to be prohibited from betting was flagged as betting on a sport at his school. The question, of course, is if it was clear to the student that Kalshi and other prediction markets are off-limits.
We don’t know the age of the student in question, but it’s far more likely that a college student tied to an athletic department could get involved in prediction markets than a regulated sportsbook. The legal age for prediction markets is 18; the legal age for sportsbooks is generally 21, with some exceptions.
Prediction markets have sometimes leaned into adoption at college campuses. Here’s an example of this taking place with a trading club at the University of Chicago in a relationship with Polymarket. The idea that they are useful tools in an academic setting — with the right guidelines and no sports betting — might be a defensible position.
Kalshi posted and then deleted a tweet about a new initiative called “Kalshi U” to bring prediction markets to college campuses. That initiative doesn’t appear to have launched after the initial comms were scrubbed.
In any event, this appears to be the first known suspension or action taken against someone betting/trading on Kalshi that wasn’t supposed to be doing so. And it probably won’t be the last.
Prediction markets news roundup
“Did Cardi B perform at the Super Bowl…?”: …appears to be one of the biggest stories to come out of Sunday for Kalshi. I wrote about it Sunday night, if you are playing catch-up.
A lot of people are mad online that Kalshi settled the market with partial payouts for both sides (26 cents on the dollar for people trading that she did “perform.”) And I sympathize! She was clearly a part of the halftime show, but there is conflicting language in the Kalshi rules on whether this constituted “performing.”
The Event Horizon became aware of at least one person that sent a “reparations complaint” to the Commodity Futures Trading Commission on Monday. The document alleges several violations of the Commodity Exchange Act:
3. SPECIFIC VIOLATIONS OF THE COMMODITY EXCHANGE ACT
The Respondent violated the following provisions of the Commodity Exchange Act and CFTC Regulations:
A. Section 5h(f) of the Commodity Exchange Act, 7 U.S.C. § 7b-3(f) – Respondent failed to enforce its own contract rules and settlement procedures in a fair, transparent, and non-arbitrary manner.
B. 17 CFR § 38.551 – Designated Contract Markets must comply with their own rules, apply them consistently, and provide clear justification when invoking emergency or discretionary powers.
C. Section 22(a)(1) of the Commodity Exchange Act, 7 U.S.C. § 25(a)(1) – Respondent engaged in unfair, deceptive, or manipulative conduct by misapplying Rule 6.3(c) without adequate
justification.
D. Breach of Contract – Respondent breached its Member Agreement and market rules by improperly invoking Rule 6.3(c) when the objective facts established that the market’s conditions were satisfied.
Whole thing here (the cover page is not included to hide personal information:
Kalshi Experiences Significant Point of Failure During Super Bowl (DeFi Rate): “Kalshi’s payment infrastructure became a significant point of failure tonight under what can only be an obscene amount of traffic. Kalshi spent months running a very aggressive acquisition campaign and onboarded PayPal and Venmo last week to prepare for the demand. Whatever preparations were made were clearly not enough and the system buckled.”
Jump Trading Poised to Gain Stakes in Kalshi and Polymarket (Bloomberg): “Jump Trading is set to gain small stakes in Kalshi Inc. and Polymarket in exchange for providing liquidity on the prediction-market platforms, according to people with knowledge of the matter. The firm’s agreement with Kalshi is for a set amount of equity in the company, said the people, who asked not to be identified discussing confidential matters. The size of the stake in Polymarket will grow over time depending on how much trading capacity Jump provides to the exchange’s operation in the US, the people said.”
How One Prediction-Market Trader Played the Super Bowl—and Lost $100,000 (WSJ): “On Sunday, Kane estimated he bought and sold more than $300,000 in market-making trades. His nearly six-figure losses came from his own wagers. …Kane, who declined to disclose his average earnings, rationalizes that big losses are just part of the job.”
“When it comes to sports betting, somebody’s the mark — because it’s gambling, right?” Kane said.
Kalshi was on Jeopardy!: And it was called “gambling.” Click through for the video.
internet hall of fame@InternetH0FOh hell nah our parents gunna use Kalshi now😭2:50 AM · Feb 10, 2026 · 23K Views28 Replies · 10 Reposts · 77 LikesAs Prediction Markets Boom, the CFTC Is Losing Lawyers in Its Flagship Office (Barron’s, paywall): There’s only one enforcement attorney left at the CFTC’s Chicago office. Known as a group of heavy-hitters, attorneys and investigators in the Chicago office have had a role in most major CFTC enforcement actions since the birth of the agency in 1975. In recent months, that office has become a ghost town.
Three former CFTC attorneys say the office’s reputation made it an appealing target for reductions in force. “I believe I was retaliated against, along with some of my colleagues,” says one who lost their job last summer.
“Chicago is the spiritual home of the futures markets; it’s where it all began,” says one former attorney in the Chicago enforcement division. “To wipe out the enforcement staff in a place like Chicago sends a very bad signal to market participants about whether the government is watching what they’re doing and whether or not they have to abide by the law.”
Many attorneys pushed out of the agency were mid-career. “If I was a different person,” one told me, “I would launch a crypto scam right now, because there’s no cops on the beat.”
Also follow Nick on social media, as he is doing lots of good work on the gambling beat.
DraftKings Expands Prediction Markets Catalog in Deal With Crypto.com (press release): Sorry for not including this earlier, it got lost in the deluge of news on Friday!
DraftKings Inc. today announced an agreement with Crypto.com | Derivatives North America, a global cryptocurrency platform and CFTC-regulated derivatives exchange, to broaden the prediction markets available on DraftKings Predictions. The expansion marks the first player-specific sports event contracts offered on DraftKings Predictions for both the NFL and NBA, extends the platform’s prediction markets offerings, and establishes the foundation for future categories, including politics.
“We’re continuing to build momentum behind DraftKings Predictions by leveraging our expertise across sports and technology and integrating additional CFTC-regulated exchanges like Crypto.com,” said Jeanine Hightower-Sellitto, Senior Vice President and General Manager of DraftKings Predictions. “This collaboration meaningfully expands customer access to trade on sports and a broader range of prediction markets and also reinforces our focus on delivering a more comprehensive and engaging experience as the product continues to evolve.”
As part of this expansion, DraftKings Predictions adds breadth across sports prediction markets in the states where the product is available, spanning soccer, MMA, golf, boxing, tennis, and the Olympic Games, to complement the existing sports and financial markets provided by CME Group. In addition to the wider scope of sports prediction markets, Crypto.com is expected to support DraftKings Predictions’ introduction of new event contract categories, including culture, entertainment, and politics. Additionally, DraftKings Predictions will integrate Railbird Exchange in the coming months, further strengthening its offering.
“Crypto.com continues to lead the way with innovative collaboration. Connecting with DraftKings, a household name in sports, is an important milestone for us because it allows us to not only expand access to prediction markets in sports, but it grows our distribution to prediction markets on cryptocurrencies, financials, companies, politics, culture, entertainment and beyond,” said Travis McGhee, Global Head of Predictions at Crypto.com. “We are thrilled to work with DraftKings, and we look forward to creating an engaging experience together for customers across the country.”
Prediction Market Singularity | The lightning rod of conversation for everyone in crypto, sports betting and finance. But where is this headed and where is the value? (Sporting Crypto): Click through for a good read, but here’s the nut of it:
We stand in a peculiar place with prediction markets. It’s quite clear that the end value is extremely valuable in a subset of contracts. It’s okay that these things could eat market share from sportsbooks, as long as they have the appropriate consumer guardrails (which currently they do not). The current commentary is so overwhelmingly fixated on sports contracts.
And as I come to the end of this 3000-word piece on prediction markets, all of this was essentially distilled recently by Charles Schwab CEO Rick Wurster:
“The first is that prediction markets offer you insights into the probability of different events. As an investor, that information is good to know about.”
On sports contracts: “That’s something we really struggle with and is counter to our mission” — “people generally don’t get better off in their financial life via gambling”
and
“We’ll leave it to the FanDuels and the Robinhoods and others that are positioning themselves as gambling firms”
People are really struggling to see the forest from the trees. In the short term, the muddled fixation on sports contracts will be resolved, and hopefully with a strong view to consumer protections.
But in the longer term, prediction markets are going to be disruptive, innovative and bigger than 99% of people think across several industries. There will be a lot of nonsense along the way, but fundamentally, the wisdom of the crowd is incredibly accurate and valuable.
Really good tweet from former Betfair employee Luke Paton: Watching from afar this stuff is just wild. I have long held the belief that the prediction markets (lol even describing it as that) won't take off in the way people are expecting. Longer term that is. This market gives a glimpse into why.’
At Betfair we had the choice to offer pretty much any market we wanted. However, there were some basic provisos.
1. It couldn't generate questionable PR.
2. It couldn't be in poor taste.
3. We had to be able to offer the mkt and be able to settle the mkt in a way that was fair to both sides of the trade. Our market rules had to be watertight. There could be nothing ambiguous. Settlement sources had to be clear.
4. We wanted markets that people would want to bet on, users would provide liquidity in and that would attract other users etc. I.e. a functioning liquid market with parties on both sides of the bet.
5. We did not want markets where the outcome would be subject to inside information, within reason.
What we see from Polymarket and Kalshi is interesting;
1. They crave the publicity of mkts that generate questionable PR. They adopt the notion that there is no such thing as bad PR.
2. They have had markets that involve things like wars. Markets involving foreign leaders like Venezuela. See number 1. No shame. Where do they draw the line? Betting on the death of someone? Any morals within the company? Public perception can change in a heartbeat.
3. They are getting themselves into a constant pickle with regards to how to offer some of these markets. They don't seem to care. It seems like they have no one to answer to. Just look at the farce with Cardi B this weekend. If it does cost them some money they aren't bothered.
4. We will come back to this point in a moment.
5. Who cares clearly.
Points number 4 and 5 are interesting in the context of the original tweet. What is really clear is that huge numbers of markets are being offered where inside information is rampant. In a normal functioning exchange market very quickly they will cease to exist. The market makers/layers just say ********* to this. I am not just going to keep getting picked off like this. They also say I am not going to keep offering liquidity in markets that you clearly don't know how to or are able to run properly. I don't want to be guessing as to how they will settle a market.
The difference with Polymarket and Kalshi is that these aren't normal exchange markets. They are markets underwritten by large liquidity providers. I have long held the belief that the following is happening. They are happy to take short term pain in order to get long term benefits. A loss leader as such. Quite normal behaviour in plenty of industries.
These liquidity providers have clearly said we don't mind taking a hit in the shorter term. Look at the bigger picture. I have no idea on the numbers but that in itself isn't important. It is more the concept. Let's say our liquidity providers are happy to lose £100m on these markets. That's clearly on the high side. However, Polymarket has seen the valuation of the company go from a valuation of $1.2bn in Jan 2025 to the current valuations of more than $12bn. That money spent to get that liquidity and PR is just a drop in the ocean relatively. Speed is of the essence. Customer numbers huge.
When you see markets operated without time delays you know the same is happening. These markets are just smoke and mirrors. I love the naivety of some of the investors in these products. Once the liquidity providers say enough is enough. Two things happen. One the markets collapse because they have no liquidity. Or two you take the players making the big money on the other side either out of the game or you monetise them differently. Think things like Premium charges/Expert fees/restrictions/commission rates.
People simply won't keep playing in markets where there is so much asymmetric information. Unless of course they are incentivised to do so. Short term great. Long term hmm. Call me a sceptic.
Senator calls out prediction markets regulator: Commodity Futures Trading Commission Chairman Michael Selig posted this recently, taking on former New Jersey governor and current American Gaming Association advisor Chris Christie:
Mike Selig@MichaelSeligStrong Disagree.
Chris Christie @GovChristieI believe Prediction Markets are violating the law. In 40 states we have regulated betting that can’t market to teenagers, pays state taxes, protects game integrity & reports suspicious activity to law enforcement. Prediction markets do none of that at all https://t.co/3dMAnS44Ex10:06 PM · Feb 5, 2026 · 224K Views108 Replies · 83 Reposts · 665 LikesSelig said several times during his nomination hearing in the Senate that the issue of the legality of sports event contracts should be left up to the courts. That included this statement:
The tweet led Sen. Catherine Cortez Masto (Nevada-D) to offer this statement: “Despite his previous promise during his confirmation process to stay out of ongoing state-led lawsuits, CFTC Chair Selig’s online comments prove he lied to Congress. Beyond that, he is profoundly wrong. Prediction markets are facilitating illegal sports gaming across the country, and it’s past time for the CFTC to do its job and enforce both its own rules and the will of Congress.”
Mass. sports betting war escalates with Polymarket suit (Axios): “Polymarket sued Massachusetts Attorney General Andrea Joy Campbell in Boston federal court Monday, accusing the state of overstepping its bounds in trying to regulate prediction markets.”
“The lawsuit comes weeks after a Suffolk Superior Court judge temporarily blocked Kalshi from offering sports wagers in Massachusetts.”
What they’re saying: “Racing to state court to try to shut down Polymarket US and other prediction markets doesn’t change federal law ...” Neal Kumar, chief legal officer at Polymarket, wrote on X Monday morning.
The latest from the Forecasting Substack:
Everything Is Gambling And We’d Be Better Off Admitting It (Casino Reports): “So here’s where we stand. Prediction markets: not gambling (federal government says so). Sweepstakes casinos: gambling (some states say so). Loot boxes: not gambling (most courts say so). Blind box toys: not gambling (nobody’s even really asking). Baseball cards: not gambling, but 100% gambling. Sports betting at a licensed sportsbook: gambling. Sports betting on a prediction market: not gambling.”
“If you can make sense of this, you’re smarter than I am. And you’re smarter than the roughly 8,372 lawyers currently billing hours trying to sort it all out. But let’s keep going, because it gets worse.”
