Prediction Markets and Athlete Health Demand Strategic Sports Industry Adaptation - Episode Hero Image

Prediction Markets and Athlete Health Demand Strategic Sports Industry Adaptation

Bloomberg Business of Sports · · Listen to Original Episode →
Original Title:

TL;DR

  • Prediction markets like Kalshi and Polymarket pose a regulatory challenge by operating outside state-licensed sports betting frameworks, potentially undermining integrity monitoring and consumer protections leagues rely on.
  • The NHL's partnership with prediction markets contrasts with other leagues' caution, indicating a strategic choice to engage with emerging platforms for data sharing and IP utilization.
  • College athletes face increased injury risk due to progressively longer seasons and year-round specialization, necessitating a holistic calendar approach beyond just in-season practice management.
  • Private equity investment in college athletics should prioritize significant allocation to medical departments, as enhanced athlete health and safety directly correlate with peak performance and revenue generation.
  • Oklahoma City's consistent success in voter-approved capital projects, including stadium developments, highlights a unique municipal finance trend that contrasts with broader taxpayer resistance to stadium funding.
  • The professionalization of youth sports and excessive single-sport specialization contribute to accumulated wear and tear on young bodies, leading to increased injuries by college and professional ranks.

Deep Dive

Sports leagues face a dual threat from the burgeoning prediction market industry and the escalating physical toll on athletes due to prolonged seasons and intensified training regimens. These developments challenge traditional revenue streams and raise significant concerns about player welfare, requiring strategic adaptation to maintain integrity and sustainability.

The rapid growth of prediction markets like Kalshi and Polymarket presents a direct challenge to sports leagues and regulators. Unlike state-licensed sports betting operations, these markets operate with fewer established guardrails, raising alarms about potential market manipulation and insider trading. While the Commodity Futures Trading Commission (CFTC) oversees these markets, their regulatory framework may not be sufficiently robust to address the unique risks posed by sports-related contracts. This regulatory ambiguity creates a tension: leagues fear compromised game integrity, while prediction markets argue they offer valuable price signals and are building monitoring programs. The NHL's partnership with Kalshi and Polymarket, sharing official data and intellectual property, represents one attempt to engage with this new landscape, contrasting with the more cautious stance of the NFL, NBA, and MLB, which emphasize the existing protections within state-regulated betting. This divergence highlights a critical question: will prediction markets operate under federal oversight that supersedes state regulation, or will they be deemed unlicensed gambling, requiring stricter state-level control? The outcome will significantly shape how sports data is leveraged and how betting integrity is maintained.

Concurrently, the increasing physical demands on athletes, particularly in college sports, are leading to a rise in injuries and long-term health issues. Extended seasons, earlier starts, and the professionalization of youth sports mean athletes accumulate significant wear and tear before reaching collegiate or professional levels. Dr. James Borchers emphasizes that the problem extends beyond game days, encompassing the intensity of practices, insufficient recovery periods, and the cumulative impact of year-round athletic activity, including specialized training and AAU circuits. This relentless cycle, he argues, compromises peak performance and increases susceptibility to injuries like Achilles tears and soft-tissue damage, which are observed even in professional leagues. The solution lies not just in managing the current season but in reassessing the entire athlete calendar, from preseason to postseason, and prioritizing recovery. For institutions receiving private equity or pension fund investments, a significant portion should be directed towards medical departments, recognizing that athlete health and safety are intrinsically linked to performance and revenue generation. Investing in preventative care, nutrition, mental health, and recovery is presented as a critical performance enhancer, not merely a cost.

The core implication is that the sports industry must proactively address these interconnected challenges. Leagues need to navigate the complex regulatory and integrity issues posed by prediction markets, potentially forging new partnerships or advocating for clearer federal guidelines. Simultaneously, a fundamental reevaluation of athlete health protocols, from youth sports through professional careers, is essential to mitigate the long-term physical consequences of increasingly demanding competitive environments. Failure to adapt risks eroding public trust, compromising athlete well-being, and undermining the economic viability of sports.

Action Items

  • Audit prediction markets: Assess 3-5 sports contracts for insider trading risk and manipulation potential (ref: Kalshi, Polymarket).
  • Design athlete recovery protocols: Implement 2-3 mandatory by-weeks per season and define practice contact limits (ref: Dr. Borchers).
  • Evaluate medical resource allocation: For 3-5 institutions, analyze current spending and recommend increased investment in athlete health and safety.
  • Track player injury accumulation: For 3-5 college programs, monitor cumulative game and practice load across 10-15 years of athlete development.

Related Episodes

Key Quotes

"Academics that have studied these types of stadium developments frequently come to the conclusion that the benefits don't necessarily outweigh the public cost of all of this. There have even been some studies that show that like a big box retail store like a target or a walmart would end up producing more revenue for the city and even more full time jobs."

Max Adler explains that academic research often suggests that the public cost of stadium developments may exceed their benefits. Adler points out that studies indicate large retail stores could generate more revenue and jobs for a city compared to stadium projects.

"The number of games you know it's it's interesting if you look at most high school football seasons in order to win a state championship you usually have to play about 15 or 16 games in most states so athletes coming into college are used to playing games albeit maybe not at the level of division one college football but I think it's what goes on around the game that we have to really pay the most attention to."

Dr. James Borchers highlights that while athletes may be accustomed to playing a significant number of games in high school, the critical factor for managing health in college sports is not just the number of games. Borchers emphasizes that the practices and activities surrounding the games, such as contact frequency and recovery time, are paramount for athlete well-being.

"The leagues were among those who submitted these letters saying here are our concerns so major league baseball the nba put in letters and they said look when we do sports when we have sports betting through state licensed sports betting operators they do certain things for us that we think are important right they have consumer protections around problem gambling and addiction but also they help us monitor markets for potential manipulation insider trading and other infractions that we care about that go to the integrity of our games."

Ira Boudway details the concerns raised by major sports leagues like MLB and the NBA regarding prediction markets. Boudway explains that these leagues value the consumer protections and market monitoring provided by state-licensed sports betting operators, which they believe are crucial for maintaining the integrity of their games.

"The argument is really like are those rules the right rules are they sufficient you know because I think there's a lot about how the CFTC regulates futures markets that doesn't really feel like a fit or enough for sports betting so this is kind of the question like do we do we let this go forward and and let the prediction markets kind of build their own rule system that we think is good enough do we say no you can't do this."

Ira Boudway articulates the central regulatory question surrounding prediction markets in sports. Boudway notes that the sufficiency of current federal regulations, specifically those from the CFTC, for sports betting is being debated, posing a dilemma about whether to allow these markets to self-regulate or to prohibit them.

"The balance of finding that recovery in my opinion is the secret sauce to best performance and I think if you look at the highest functioning teams and most sports if you look at the highest functioning organizations they've discovered that they understand that and they focus on it and they understand you know how to manage that and how to make certain that their athletes are able to perform at their peak performance."

Dr. James Borchers asserts that effective recovery is essential for optimal athletic performance. Borchers explains that top-performing teams and organizations recognize and prioritize recovery strategies, understanding that an athlete's peak performance is contingent on their physical, mental, and emotional well-being.

"My recommendation is look at it and spend a lot more than what you think you need to be spending and really study it our thanks to dr james borchers for joining us he's chief medical officer at the big ten conference and president and ceo of the us council for athletes' health."

Dr. James Borchers strongly advises institutions to significantly increase their investment in medical departments and athlete wellness. Borchers emphasizes that dedicating more resources to areas like nutrition, mental health, and daily health and safety yields substantial returns by keeping athletes healthy and performing at their best.

Resources

External Resources

Books

  • "Starting Five" - Mentioned in relation to a Netflix documentary about the Oklahoma City Thunder's championship run.

Articles & Papers

  • "Bloomberg News municipal finance reporter Maxwell Adler his reporting on the son of one-time bond king Bill Gross joining NBA star Russell Westbrook in backing a new entertainment district in Oklahoma City anchored by a new soccer stadium." (Bloomberg News) - Discussed as the source of information regarding a new entertainment district in Oklahoma City.
  • "Bloomberg News US sports business reporter Ira Boudway on his story detailing the enormous growth of prediction markets like Kalshi and Polymarket in the world of sports - and why sports leagues and regulators should be wary." (Bloomberg News) - Discussed as the source of information regarding the growth of prediction markets in sports.

People

  • Maxwell Adler - Municipal finance reporter for Bloomberg News, discussed for his reporting on a new entertainment district in Oklahoma City.
  • Bill Gross - Mentioned as the father of Nick Gross, who is involved in a new entertainment district project.
  • Russell Westbrook - NBA star involved in backing a new entertainment district in Oklahoma City.
  • Nick Gross - Son of Bill Gross, involved in backing a new entertainment district in Oklahoma City and has connections in the music industry.
  • Christian Kennedy - Leader of Echo Investment Partners, involved in a new entertainment district project in Oklahoma City.
  • David Holt - Mayor of Oklahoma City, mentioned for his pro-development stance.
  • Ira Boudway - US sports business reporter for Bloomberg News, discussed for his story on prediction markets in sports.
  • Audi - A professional trader who previously worked for the trading arm of Kalshi, shared an anecdote about trading on confirmation of a Secretary of Energy.
  • Jennifer Granholm - Mentioned in relation to a prediction market on her confirmation as Secretary of Energy.
  • Sean C Billups - Mentioned in relation to an alleged plan involving giving out injury information.
  • Dr. James Borchers - President and CEO of the US Council for Athletes' Health and Chief Medical Officer for the Big Ten Conference, discussed for his insights on athlete health.
  • Michael Barr - Co-host of Bloomberg Business of Sports, mentioned as being off this week.
  • Damian Sassauer - Co-host of Bloomberg Business of Sports, mentioned as being off this week.
  • Vanessa Perdomo - Host of Bloomberg Business of Sports.
  • Randall Williams - Bloomberg US sports business reporter and guest host, discussed for his reporting and insights.

Organizations & Institutions

  • NBA (National Basketball Association) - Mentioned in relation to partnerships with sports betting operators and potential concerns about prediction markets.
  • Oklahoma City Thunder - Mentioned for their impact on Oklahoma City's economy and population growth.
  • US Council for Athletes' Health - Organization focused on athlete health, safety, and well-being, working with NCAA institutions and conferences.
  • USOPC (United States Olympic & Paralympic Committee) - Mentioned as a group the US Council for Athletes' Health works with.
  • NCAA - Mentioned in relation to the US Council for Athletes' Health working with its institutions and conferences.
  • Big Ten Conference - Mentioned in relation to Dr. James Borchers' role as Chief Medical Officer.
  • Echo Investment Partners - Entity leading the development of a new entertainment district in Oklahoma City.
  • Oklahoma City Football Club - Currently playing in the USL as the Oklahoma City Energy, with aspirations to reach MLS.
  • USL (United Soccer League) - Mentioned as a league that will adopt relegation, aiming to compete with MLS.
  • MLS (Major League Soccer) - Mentioned as a league the USL aims to compete with.
  • Kalshi - A prediction market platform discussed for its growth in sports and regulatory challenges.
  • Polymarket - A prediction market platform discussed for its growth in sports and regulatory challenges.
  • CFTC (Commodity Futures Trading Commission) - Mentioned as the federal body that oversees prediction markets.
  • New Jersey - State mentioned as having gaming regulators that have taken action against prediction markets.
  • Nevada - State mentioned as having gaming regulators that have taken action against prediction markets.
  • UFC (Ultimate Fighting Championship) - Mentioned as having a partnership with Polymarket.
  • NHL (National Hockey League) - Mentioned as having partnerships with Kalshi and Polymarket, sharing official data.
  • NFL (National Football League) - Mentioned in relation to partnerships with sports betting operators and concerns about prediction markets.
  • MLB (Major League Baseball) - Mentioned in relation to partnerships with sports betting operators and concerns about prediction markets.
  • US House - Mentioned as the body before which the NFL testified regarding prediction markets.
  • Cincinnati Bengals - Mentioned in a comparison of medical staff resources.
  • Ohio State - University mentioned in relation to its medical department resources and conversations with a pension fund.
  • Wright State - A smaller university mentioned in comparison to Ohio State regarding athlete care resources.
  • US Olympic & Paralympic Committee - Mentioned as a group the US Council for Athletes' Health works with.
  • Big 12 - Conference mentioned in relation to a private equity deal.
  • Utah - State mentioned in relation to a private equity deal.
  • California Pension Fund - Mentioned as having had conversations with Ohio State that were put on pause.

Tools & Software

  • Odoo - An all-in-one business management platform.

Websites & Online Resources

  • omnystudio.com/listener - Mentioned for privacy information.
  • ebay - An online marketplace for finding items with stories.

Podcasts & Audio

  • Bloomberg Business of Sports - The podcast where this episode aired.
  • Health Discovered - A podcast mentioned in relation to multiple sclerosis.
  • iheart - Mentioned as America's number one podcast network.

Other Resources

  • Prediction Markets - A concept discussed extensively regarding their growth in sports and regulatory implications.
  • Relegation - A system adopted by the USL, similar to European football leagues.
  • Moneyball - Mentioned in the context of playing with a large budget and being very good.
  • NIL (Name, Image, and Likeness) - A concept in college athletics discussed in relation to player compensation and its toll on athletes.
  • Periodization - A concept related to training and recovery in sports.

---
Handpicked links, AI-assisted summaries. Human judgment, machine efficiency.
This content is a personally curated review and synopsis derived from the original podcast episode.