A recent college football betting case underscores a broader challenge: Sports betting is no longer simply an athletics-compliance issue. It can implicate athlete commitments, roster decisions, conference obligations, institutional reputation, and litigation. Colleges and universities need coordinated policies that address these overlapping legal, regulatory, contractual and operational risks.

Brendan Sorsby was supposed to spend this fall leading Texas Tech’s football team. The quarterback had transferred to Lubbock after playing at Indiana and Cincinnati and was expected to help a Texas Tech program coming off a Big 12 championship.

Instead, his season unraveled after an NCAA investigation found that he had placed thousands of sports bets totaling approximately $90,000, including 40 wagers involving Indiana football while he was on the team. Sorsby and his lawyers said he suffered from a gambling addiction and had undergone treatment.

The NCAA ruled him ineligible. But in June, a Texas judge temporarily blocked the NCAA from enforcing that decision, potentially clearing Sorsby to play while his lawsuit proceeded. Coaches and athletic directors expressed alarm and Big 12 officials discussed possible sanctions. Sorsby ultimately left college football rather than continue the dispute and his efforts to enter the NFL in 2026 via a supplemental draft were unsuccessful.

Simpler Rules

For decades, the NCAA’s sports-betting rules operated within a much simpler model. Athletes were amateurs, schools controlled most of the economic relationships surrounding college sports, and the NCAA could impose eligibility rules against a relatively stable background.

The basic compliance message was straightforward: Athletes and athletics personnel couldn’t wager on sports the NCAA sponsored, and violations could result in lost eligibility.

Athletes now transfer freely, earn name, image, and likeness compensation, receive direct payments from schools, and enter contracts carrying substantial financial consequences. At the same time, legal sports betting has expanded across the country, easy-access online gambling has increased in popularity, and courts have become increasingly willing to scrutinize NCAA restrictions.

That difference helps explain why Sorsby’s case became so difficult. A violation that might have ended with an NCAA eligibility determination several years ago instead implicated addiction treatment, contractual commitments, and litigation.

What Sorsby Exposed

Texas Tech argued that permanent ineligibility was unfair given Sorsby’s treatment for a gambling addiction. But the NCAA emphasized that Sorsby had wagered on his own team, conduct its rules treat as particularly serious because it implicates integrity of the game.

The ensuing litigation was a firestorm. The Texas District Court in Lubbock County granted Sorsby temporary relief and originally set his trial for after the conclusions of the football season and College Football Playoff. The NCAA appealed to Texas’ Court of Appeals, where all four sitting justices are graduates of Texas Tech University School of Law, adding thorny optics to an already unusual situation.

The public reaction was, to borrow from football, that of a hostile road crowd. Big 12 athletic directors discussed whether teams could refuse to play Texas Tech. Georgia and Nebraska later barred their teams from scheduling Texas Tech, while Big 12 officials considered financial and championship-related sanctions. The conference ultimately filed a federal lawsuit seeking to preserve its authority to punish Texas Tech if the school fielded Sorsby.

The NCAA is also beginning to distinguish more carefully among types of gambling violations. In July, Division III amended its reinstatement guidelines to permit reduced penalties for a first violation that doesn’t involve integrity concerns when the athlete engages in appropriate clinical evaluation or support. Though the rule is limited to Division III, its logic is notable — protecting competition integrity and addressing problem gambling needn’t always require identical responses.

Prediction Markets

Sorsby also illustrates the challenges universities face when enforcing sports-betting rules against athletes. But institutions face a related problem on the other side of the equation. Wagering venues have vastly expanded, and the rules governing those products aren’t uniform. Prediction markets, which allow someone to buy a contract based on whether an event will occur, are the clearest example.

A contract might cost 60 cents and pay $1 if Texas Tech wins its next game. If Texas Tech loses, the buyer gets nothing. To the customer, the transaction can look like a sports bet. Legally, however, the difference can be substantial.

Traditional sportsbooks are generally regulated by states. Prediction-market operators such as Kalshi offer “event contracts” on federally regulated exchanges and contend that those products fall under federal commodities law. That has led to a dispute over whether a contract predicting the winner of a football game is a sports wager that states may regulate or a federally regulated financial contract.

Federal and state regulators are litigating that question around the country. The Commodity Futures Trading Commission, or CFTC, has sued states including New Mexico, arguing that federal law gives it exclusive authority over event contracts traded on federally regulated markets. The federal regulator also proposed new rules in June for evaluating event contracts involving sports, gaming and other specified activities.

So why should universities care which regulator wins? Because similar wagering activity may come with different safeguards depending on what the product is called and who regulates it. The NCAA also this year asked the CFTC to pause college-sports prediction markets until there are additional safeguards.

Counsels’ Role

First, institutions should draft policies around conduct rather than particular products. A policy addressing only “sportsbooks” may fail to capture prediction markets, event contracts, and the next wagering product that receives a different legal label.

Second, schools need a response plan before a violation occurs. That means deciding who investigates, who preserves betting and communications evidence, when counsel becomes involved, when the conference or NCAA must be notified, and who communicates externally.

Third, schools should identify who has access to injuries, discipline, player availability, strategy and roster moves, and establish clear rules for coaches, trainers, student managers, collectives, contractors, and vendors who possess that information.

Finally, transfer diligence deserves greater attention. Schools now make substantial NIL and revenue-sharing commitments to athletes moving between programs. Appropriate representations and diligence concerning prior wagering conduct or pending investigations may avoid discovering an eligibility problem after those commitments have been made.

College sports can’t keep wagering outside the gates. The more realistic task is ensuring that institutions know which rules apply; what information requires protection; and who makes decisions when NCAA rules, courts, conferences and new betting markets point in different directions.

This article does not necessarily reflect the opinion of Bloomberg Industry Group Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

B. Todd Jones is a partner at Robins Kaplan and former senior vice president and special counsel for conduct at the NFL, where he spent nearly a decade overseeing the league’s investigatory and disciplinary processes, including matters involving legalized sports betting.

Zac Cohen is an associate in Robins Kaplan’s Los Angeles office, handling IP, business, and media disputes.

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