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Prediction markets Kalshi and Polymarket are reportedly pouring money into deals with social media influencers and students to promote their products, presumably on campus.
The Wall Street Journal referred to this campaign as "The wildest frat party on campus", with a question mark.
The practice, however, could further draw the ire of state regulators.
Joe Brennan Jr., a longtime U.S. sports-betting industry executive, lobbyist, and entrepreneur, noted that Ohio regulators once fined Barstool Sportsbook for doing the same thing. That book has since rebranded twice to BetESPN and its current incarnation as TheScore.com.
"I was at a hearing where OH regulators fined Barstool $250,000 on the spot for promoting just outside a campus," Brennan Jr. tweeted.
The fine in question was handed down in February of 2023. Barstool Sportsbook targeted individuals under 21 at a November 2022 event at the University of Toledo. The violation stemmed from a months long probe into the matter whereby Barstool was found to be marketing sports betting to college students, violating state regulations.
(pictured above: Joe Brennan, Jr)
The WSJ article focuses on a University of Miami fraternity, Sigma Alpha Epsilon, that attracts some of the nation's wealthiest students, including the stepson of Amazon founder Jeff Bezos.
In February, the online prediction market Kalshi was offering wagers on which celebrities would show up at the Super Bowl. The odds of Bezos attending were high—a potential jackpot for anyone who actually knew his weekend plans, which didn’t involve a trip to Levi’s Stadium.
Some fraternity brothers soon began placing bets that Bezos would not attend. Two people who bet said the original source of the information was Whitesell, though neither heard it directly from him. The information spread fast through the house and the alumni network. Within days, it had spread by text message to at least one other college campus.
On Kalshi, the odds of Bezos appearing plummeted from around 70% to less than 30%.
“We know this shouldn’t be allowed,” said one brother involved. “People are like, is this insider information? Is this regulated? You feel like you’re doing something you’re not supposed to. It feels like someone should stop you.”
In the end, Bezos didn’t attend the game while bets among the fraternity brothers and their friends ran as high as $10,000 per person.
Katherine Long, Kevin T. Dugan, Dana Mattioli, Angel Au-Yeung, reporting for the Wall Street Journal, highlight how both Kalshi and Polymarket have began pouring money onto college campuses, mostly by way of social media influencers.
Both platforms have been paying student influencers to promote them as ways to raise fun money, hiring student athletes as brand representatives and supporting student clubs, the WSJ report notes.
The National Collegiate Athletic Association is raising alarms about betting on college games, and state regulators are likely to start taking notice just as they did in Ohio back in 2023.
The target audience are those 18 to 21, prohibited from betting at most regulated sportsbooks in the U.S. with a few exceptions. Wyoming, Montana, Rhode Island, Kentucky, New Hampshire and Washington, D.C allow those 18 and up to place bets.
Kalshi spokeswoman Elisabeth Diana said Kalshi is “fairer and more transparent than casinos and sportsbooks.” She said 18- to 21-year-olds represent 3% of overall trading volume on the platform, and that the average user on Kalshi is 33 years old. The platform has “age gating requirements,” she said, and its marketing isn’t focused specifically on college students.
Polymarket said it has collaborations with blockchain and emerging-technology clubs at universities nationwide to “gain insights about its platform and products.” The company said it has clear terms of use for its participants and “was built to help people make sense of the world through transparent, market-based probabilities.”
Chris Costigan, Gambling911.com Publisher
