New Jersey Advances Ban on College Athlete Prop Bets Amid Rising Harassment Concerns
A New Jersey Senate panel moved forward with a bill to outlaw player-specific prop bets on college sports in the New Jersey sports betting market.
This is one of several similar efforts, including one at the national level, aimed at protecting student-athletes from abuse targeted at them. Senate Bill S-3080, introduced by Sen. Kristin Corrado, passed the Senate State Government, Wagering, Tourism & Historic Preservation Committee on June 18 and is pending a vote before the full Senate.
The bill would prohibit New Jersey sports betting apps and retail locations from accepting wagers on a player's performance in college games. That would include player-specific prop bets on points scored, rebounds, or first to score.
Sen. Corrado said she drafted the bill to target the rising harassment that student-athletes are forced to endure due to the volatile nature of prop betting. She argued that websites enable immediate and often harassing contact between upset bettors and financially unremunerated college players, which threatens the players' mental well-being and the integrity of college sports.
Specifically, the law deems any bet not explicitly tied to the final result of a game to be a prop bet. While marketed as interactive and fun, the use of these bets on college games creates a special problem due to the amateur status of the athletes. The time has come in the Garden State that you won't see these wagers anymore as a New Jersey sportsbook promo.
Kalshi case raises regulatory questions about event-based betting
A lawsuit filed against prediction market site Kalshi has become a lightning rod in the national debate over sports betting regulation, with the case now before the U.S. Court of Appeals for the Third Circuit.
The issue is whether the event contracts that Kalshi offers, enabling people to predict on the outcome of real-world events, fall within the jurisdiction of the Commodity Futures Trading Commission (CFTC) rather than state gaming regulators.
Kalshi sued to enforce a New Jersey cease-and-desist letter on the theory that its contracts are federally regulated commodities, not traditional sports bets. It's the first case against the company to reach the appellate level, and it has sparked broad legal discussion in the form of amicus briefs.
A coalition comprising the American Gaming Association (AGA), 34 states' attorneys general, the District of Columbia, the Northern Mariana Islands, and several tribal organizations has filed opposing amicus briefs.
They argue that allowing the CFTC to regulate event-based wagering can upset the regulatory clarity established since the Supreme Court’s 2018 Murphy v. NCAA ruling, which confirmed states’ rights to regulate sports betting.
Other organizations, including Stop Predatory Gambling and the New Finance Institute, also submitted amicus briefs, stating they were concerned about regulatory fragmentation. The AGA contends that Kalshi's model poses an arbitrary threat to entrenched systems and would contribute to confusion in the already complex legal regime governing gambling and financial products.
