Doug GreenbergShwetha SurendranCloseShwetha SurendranESPNShwetha Surendran is a reporter in ESPN’s investigative and enterprise unit.Dec 19, 2025, 07:46 AM ET
In 2025, seven years into legalized sports betting, the industry faced some of its biggest challenges yet, rocked by multiple high-profile scandals, embroiled in taxation issues and confronted by a fast-growing disruptor to the traditional bookmaking model.
“It’s a once-in-a-lifetime event watching these worlds collide, and very rarely do you see it happen in any industry, let alone all at the same time,” said Max Bichsel, an executive with Gambling.com Group, which runs sportsbook affiliate websites.
Here are the stories that dominated sports betting’s year — and will continue to be battlegrounds in 2026.
Two weeks earlier, federal authorities arrested and charged 34 people — including Miami Heat guard Terry Rozier, Portland Trail Blazers head coach Chauncey Billups and former NBA player Damon Jones — in two gambling cases involving alleged insider betting and allegedly rigged poker games.
Billups, Rozier and Jones have pleaded not guilty, as have Cleveland Guardians pitchers Emmanuel Clase and Luis Ortiz.
“We’re in a bit of a watershed moment this year,” said Jason Van’t Hof, a former vice president of investigations at integrity monitor IC360, which works with most of the major leagues. He believes the indictments and congressional attention will prompt the leagues to take further action, whether in public or behind the scenes.
Many of the cases involve individuals allegedly manipulating their performances so that bettors could wager on their statistics, whether that be pitches or points scored. That has increased scrutiny on player prop bets, which can be easier to fix because they are dependent on a single person’s behavior.
“When they’re just based off of individual performance, I think it’s a lot easier for match fixing in that type of situation,” an NCAA official told ESPN. “You don’t have to get to the overall team, you could just have one individual that could manipulate those markets.”
Prop bets have become increasingly popular in recent years, especially because they are often the building blocks for parlays and same-game parlays: DraftKings saw a significant increase in parlay handle mix from 2024 to 2025, according to the company’s most recent earnings report.
After Clase and Ortiz were federally indicted, MLB and its partner sportsbooks established a $200 limit on bets involving individual pitches. The NCAA has long petitioned sportsbooks and state regulators to go further and eliminate player props on college players altogether.
The NCAA official said that players from smaller programs could be bigger targets for bet fixing because their teams are no longer in tournament contention or they have lesser pro aspirations. Most of the players the NCAA has investigated this season for gambling violations come from such smaller programs.
Industry advocates say the proliferation of scandals is proof that the regulatory system is working and that eliminating bets would only serve to drive the wagering underground.
“You’re always going to have bad actors. We’re never going to be able to completely eliminate it,” a representative from a major sportsbook said. “But the goal is to really expose it, and by limiting what’s offered, that’s not going to do anything other than to make it go back to where it was before, which was the illegal markets.”
Joe Maloney, president of the Sports Betting Alliance, an advocacy group for the major sportsbooks, said the gambling cases show the role sportsbooks play in catching wrongdoing.
“Hopefully, these announcements and these suspensions not only serve as a deterrent, but demonstrate how legal sportsbooks play an important role in exposing these bad actors,” he said. “Fans aren’t going to buy jerseys, fans aren’t going to watch the games, fans aren’t going to buy tickets if they think the competition is rigged, and bettors will not bet on the games if they think the competition is rigged.”
However, in a letter to MLB in the wake of the Ortiz and Clase indictments, a U.S. Senate committee expressed concern over a “new integrity crisis” facing American sports.
“An isolated incident of game rigging might be dismissed as an aberration, but the emergence of manipulation across multiple leagues suggests a deeper, systemic vulnerability,” the senators wrote. “These developments warrant thorough scrutiny by Congress before misconduct issues become more widespread.”
While sportsbooks deal with gambling scandals, a new way to stake money on the outcome of sporting events has risen to disrupt the industry. Prediction markets, where users can bet on the yes/no outcome of events, have quickly gained momentum this year despite legal challenges and regulatory uncertainty.
One of the big players in the prediction market space, Kalshi, announced this month that it now sees over $1 billion traded on its platform each week, a 1,000% increase from 2024. Polymarket, the largest prediction market operator in the world, launched on a limited basis in the U.S. this month.
Sports account for the majority of Kalshi’s trading volume, according to data collated by the user datadashboards on Dune Analytics, an open-source crypto data platform, and the company has gradually increased its sports offerings over the year. This fall, Kalshi began offering prop bets on the NBA and NFL, and on Monday, Tarek Mansour, Kalshi’s cofounder, announced the launch of “combos,” or multiple-leg trades similar to parlays.
Mansour has said that he didn’t know what his product “has to do with gambling.” “If we are gambling, then I think you’re basically calling the entire financial market gambling,” he added.
Prediction market companies say one difference is that users are not going up against the house but instead trading contracts with other users on the opposite side of the proposition. While bookmakers charge a vig on losing wagers, prediction markets make money from a transaction fee, similar to a broker, and have no stake in the result.
Traditional sportsbooks operate in 39 states and the District of Columbia. Prediction markets can operate in all 50 states because of the way they are regulated.
As a result, oversight of prediction markets is being contested in courts across the country. State gaming regulators, which oversee traditional sportsbooks, argue that Kalshi is violating state laws by offering event contracts that mimic sports bets. Kalshi argues it does not fall under state jurisdiction and is instead regulated by the Commodity Futures Trading Commission, a federal agency.
The CFTC has yet to weigh in. President Donald Trump’s nominee to lead the agency was confirmed Thursday. Donald Trump Jr. is an adviser to both Polymarket and Kalshi.
Kalshi previously told ESPN that it underwent a six-year process to be certified as an exchange regulated by the CFTC. This allows them to list any new offerings through a self-certification process without prior approval from the federal agency, which can later review products and flag them for violations.
The NFL questioned the oversight of prediction markets and its implications for sporting integrity in congressional testimony last week.
The newly formed Coalition for Prediction Markets, which represents many of the largest operators in the space, including Kalshi, disputed Miller’s testimony.
“This testimony is like saying the stock market has no rules,” a coalition spokesperson told ESPN in a statement. “The CFTC’s regulations on abusive or manipulative trading apply to prediction markets just like the SEC’s regulations apply to the stock market. This activity is strictly prohibited by both the CFTC and prediction markets, and we use a variety of tools before, during, and after people trade to prevent illegal trading and bring enforcement action when violations happen.”
Kalshi partners with IC360, which announced this month that it will work with Eventus, a market surveillance company, to monitor prediction markets.
Joe Schifano, the global head of regulatory affairs for Eventus, said that it isn’t surprising to see instances of bad behavior early in a market.
“You have lots of new entrants. People need to be educated,” he told ESPN. “There are absolutely going to be instances in a new market where people think that they can push the envelope. We’ve seen it, time and time and time again in history. So that’s why we monitor.”
Ian McGinley, a former director of enforcement for the CFTC, said that building expertise in a new market such as sports takes time.
“Every market is going to have the same kind of problems, whether you’re talking the stock market, the crypto market, the betting market, the prediction market,” McGinley told ESPN. “And so what you see in a lot of these markets are people who have inside information, either tipping it to someone else and then they trade, or they trade on it themselves.”
McGinley said prediction market companies are obligated to report their data to the CFTC, which employs “sophisticated market surveillance tools.” He added that the CFTC has never brought a case against prediction markets for insider trading or manipulation but that the agency can levy financial penalties and restraints on participation against violators.
In its congressional testimony, the NFL pointed to a prediction market recently accepting trades on whether phrases such as “concussion protocol,” “late hit,” or “roughing the passer” would be mentioned during game broadcasts.
“Congress and the CFTC should prohibit these and other types of objectionable bets among the many consumer and integrity protective measures needed before sports-related events contracts are legalized,” Miller wrote.
McGinley, the former CFTC official, noted the similarities between these types of mention markets and player props.
“That’s almost just like what we saw in the NBA cases, where if you’re a particular player, and it’s an up or down on whether you score above eight points, you can control that,” he said. “Well, you can also control when you’re on a call whether you say 10 words. And so exactly the same concern.”