The announcement came two weeks after the NHL season started and landed plenty of fanfare and publicity, especially with the big business publications.
The Wall Street Journal, Bloomberg, CNBC and Fox Business were all talking about hockey, or at least something hockey-adjacent, as the league promoted new partnership deals with prediction market companies Kalshi and Polymarket.
Utah Mammoth owner Ryan Smith was part of the PR push and trumpeted the agreements on Fox, calling the increased prevalence of betting “part of fan engagement” and “where our gaming society is going.”
“For me, I love that the NHL is leaning in and trying to partner (with them),” Smith said of Kalshi and Polymarket. “I think it’s smart to help maybe curate an experience and try to do something innovative.”
“Two great partners and couldn’t be happier to have both of them,” NHL president of business Keith Wachtel told Bloomberg. “And (excited for) what we think this does for the NHL in growing engagement but also allowing us to participate with those two companies in helping build what markets they’re going to use and making sure the NHL is part of that, which is really important.”
Their excitement, however, has not been shared elsewhere. Government officials in the U.S. and Canada, along with gaming association officials and anti-match-fixing experts, were alarmed. That a major North American sports league had partnered with what they view as effectively unlicensed and underregulated betting companies was fresh new territory they had hoped to avoid.
“I think it’s a little bit crazy,” said Chris Kronow Rasmussen, a director of financial crime prevention at Advisense and adjunct professor of sports betting integrity at the University of New Haven. “They don’t call it sports gambling but prediction markets. But basically it’s the same. They don’t call it sports betting because then they would need a license.”
Bill Miller, the president and CEO of the American Gaming Association, quickly branded the NHL’s twin partnerships “deeply concerning,” pointing to the heavy volume of ongoing litigation around the fledgling companies.
“Contrary to the league’s claims, the future of these platforms is far from certain, evidenced by the legal proceedings in multiple states, the views of well over half of the nation’s attorneys general, and state regulators determining these platforms to be illegal,” Miller said in a statement. “This move sends a troubling message: that integrity, responsibility, and clear legality are optional in sports gaming.”
Other major North American sports leagues have also pushed back. The NFL, NBA and MLB have all been critical of Kalshi and Polymarket, at least publicly, including sending the Commodity Futures Trading Commission letters voicing concerns over their exponential growth — growth that, as of earlier this year, is mostly due to sports-related contracts. The NCAA recently joined the chorus, sending a legal letter to Kalshi in an attempt to distance itself from the appearance of a partnership with the company.
“These contracts would mimic sports betting but seemingly without the robust regulatory features that accompany regulated and legalized sports betting, and which help to mitigate threats to the integrity of our contests,” Jonathan Nabavi, at the time the NFL’s vice president of public policy and government affairs, wrote in a letter to the CFTC.
At the heart of the controversy is the somewhat semantic argument of what constitutes sports betting. Prediction market companies argue what they are offering is actually an exchange selling financial products, a description they’ve used historically as part of offering “contracts” where people can put money on the line while weighing in on everything from election outcomes to natural disasters. That designation is why a federal financial regulator like the CFTC is involved in an oversight capacity instead of a state gaming commission.
It’s also how Kalshi can currently allow younger people to wager than regulated sportsbooks, which have a minimum age of 21, and how it continues to operate across the U.S. — even in the many states where online sportsbooks are banned. (It is currently unavailable in Canada, the UK and Australia.)
It’s a fight that has become political, with Kalshi facing lawsuits in states such as Massachusetts and the company returning the favor elsewhere. The states argue Kalshi is accepting online wagers without following state laws that govern sports gaming or obtaining licenses from state gaming commissions.
Meanwhile, Donald Trump Jr., the U.S. President’s son, was named a strategic adviser to Kalshi in January and then to a similar role with Polymarket seven months later.
Adding to the complexity (and controversy) is the fact that Polymarket, in particular, is a cryptocurrency-based prediction market, something that further aligns it with incoming CFTC head Mike Selig. Polymarket is set to return to the U.S. in the near future after several years out of the market after a $1.4 million settlement with the CFTC for operating an unregistered exchange.
Critics argue the issue with having the CFTC attempt to oversee what is effectively sports wagering is that it is ill-prepared to do so, especially in comparison to the heavily regulated gaming bodies that have been developed at the state and provincial levels in North America over the past decade.
Kalshi head of corporate development Sara Slane disputed that notion and called the oversights in place for prediction markets appropriate. Polymarket did not respond to a request for comment.
“Kalshi has state-of-the-art surveillance, (anti-money laundering) protections and compliance infrastructure, including suspicious trading detections,” Slane said. “The CFTC has strong regulatory standards that have safely overseen trillions of dollars in American commodities markets for decades. It’s a ridiculous claim to assert that just because Kalshi is not subject to the jurisdiction of state regulators, we do not have integrity provisions in place to monitor suspicious trading.
“People are coming to Kalshi because our product is better for the end customer. That’s what these claims are really about — legacy players trying to defend their turf. They are more interested in protecting their state government-protected monopolies than doing what is in the best interest of the customer.”
Rasmussen, however, compares the situation with the rise of prediction markets to the influence unlicensed bookmakers have had overseas in soccer, including lucrative sponsorships and match-fixing scandals.
“In my view, they are not doing their homework on the governance part,” he said. “If you don’t have a license, you don’t have any obligation towards any laws in the state or in the country. Then you basically don’t know where the money is coming from and you don’t know if there is any tax evasion or money laundering or match-fixing attempts and so on. So if there is match fixing — and we’ve seen that lately in the U.S. — then you will only see that in the ones that are regulated.”
The NHL’s partnership with the prediction markets has come at a time when the relationship between sports betting and competitive integrity is under increased scrutiny, from the NBA’s alleged match-fixing scandal to the indictment of two MLB pitchers on the weekend.
Hockey has not been immune to betting-related concerns, with last year’s Shane Pinto suspension and the Arthur Kaliyev investigation serving as recent examples.
It may well be that the league is simply reading the evolving landscape — politically, financially and otherwise — and views getting in bed with these companies as inevitable. Prediction markets have become massive business — with Kalshi’s latest round of VC funding valuing the company at $5 billion — and it’s possible there will be a wave of similar partnerships coming from other leagues, as the NFL, NBA and MLB get onboard as a way to attempt to influence how their games are presented on these sites.
When contacted for comment on the partnerships with Kalshi and Polymarket and asked why the NHL was alone in doing such deals, a league spokesman referred The Athletic to the media appearances made by league personnel when the agreements were first announced.
Wachtel, for example, told Bloomberg TV that having Kalshi and Polymarket as partners will give the NHL some control over how the league appears on their sites and apps, including using full team names and logos, something the prediction markets have to date been unable to use. And Wachtel indicated they will invest in ensuring nothing untoward happens, potentially building out the league oversight piece that is currently missing.
The NHL is currently a tiny sliver of the up to $800 million that’s spent weekly on Kalshi’s sports markets, ranking well behind the other three big North American leagues, as well as trailing NCAA football, the PGA Tour, and men’s and women’s tennis. That likely changes with these announcements, as the NHL legitimizes and promotes the partnerships.
“It allows us to determine with our partners what prediction markets we want to provide to consumers,” Wachtel said on Bloomberg. “We’re both looking at using integrity monitoring services to make sure there are no issues in that area as well.”
Rasmussen, however, remains skeptical of such an arrangement, as without robust governmental checks and balances there can be financial incentives to looking away from potential match fixing.
And the end result of unchecked wagering can be devastating.
“You can ruin the league,” Rasmussen said. “Because it will be all about money, money laundering and match fixing. We’ve seen that in other countries. (Without proper regulations), there will be a bigger risk of match fixing and money laundering, and when that risk rises, you don’t trust the games. And when you don’t trust the games, you don’t want to go see them.”
Editor’s note: The Athletic has a commercial partnership with BetMGM.