Bloomberg Business of Sports

Episode Summary: "Why Prediction Markets Should Scare Sports Leagues" (December 19, 2025)

Overview

This episode of Bloomberg Business of Sports, hosted by Vanessa Perdomo with co-host Randall Williams, dives into several interlinked topics at the intersection of sports, finance, and technology. The prime focus is on the rapid rise of prediction markets in sports, why these platforms are causing concern among leagues and regulators, and how this new wave of financial speculation could transform sports integrity and business models. Additional segments explore the economics of new sports developments in Oklahoma City and the growing pressures on athlete health in college sports.

Segment 1: Oklahoma City’s New Sports District & Stadium Development

[02:56 – 14:42]

Key Points:

• Russell Westbrook’s Investment:

  • NBA star Russell Westbrook is investing in a new mixed-use entertainment district in Oklahoma City, anchored by a soccer stadium.
  • Backed by Nick Gross (son of Bill Gross) and Echo Investment Partners, with significant public funding support ($120 million).
  • Mirrors a growing national trend where cities use sports venues as anchors for urban development.

• Will Stadium Development ‘Revitalize’ the City?

  • Max Adler (Bloomberg municipal finance reporter):

    "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 jobs." ([05:29])

  • Yet, the Thunder's impact on Oklahoma City is undeniable—since 2008, GDP and population have both surged, showing the potential indirect benefits of sports franchises.

• Cultural Expansion & Olympic Spotlight:

  • Oklahoma City will host events during the 2028 LA Olympics (softball and whitewater rafting).
  • Ratio of public investment to long-term visibility and civic pride is hard to quantify.

• Soccer Stadium & Music Venue Economics:

  • The stadium will start with 11,000 seats, expandable to 20,000.
  • Nick Gross’s background in music is expected to bring major concerts and festivals to a region underserved by current festival circuits.
  • The Oklahoma City Energy (now USL, possibly MLS ambitions) are spearheading this with the hope that USL’s upcoming relegation system will boost status.

• Local Appetite for Public Funding:

  • Oklahoma City is an anomaly, consistently approving public funding for capital and sporting projects—15 for 15 since 1993.

    "Oklahoma City really stands out as an anomaly in respect to getting its voters to approve capital projects that are municipally funded." ([13:18])

  • Contrast with taxpayers in other states who are experiencing ‘spending fatigue’ over publicly funded stadiums.

Notable Quote:

• Max Adler, on potential superstar tours:

  “If the Jonas Brothers do tour in Oklahoma City, Vanessa, we are going.” ([09:50])

Segment 2: The Rise and Risks of Prediction Markets in Sports

[17:19 – 29:32]

Key Points:

• Explaining Prediction Markets:

  • Emerging online platforms (e.g., Kalshi, Polymarket) that allow betting on a broad range of sports-related and real-world outcomes.
  • Originated in political markets, now rapidly expanding into sports.

• Tension Between Information & Integrity:

  • Ira Budway (Bloomberg US Business reporter):

    • Shares anecdote about a trader leveraging insider information (Senate staff tip) in a political prediction market. In politics, it’s applauded; in sports, it could be a crime.

    "...as events contracts, as prediction markets get into sports could be a real problem...This is almost exactly the kind of story that you see, for instance, in the federal case against...NBA players...who had information about who was or wasn’t going to be starting and they use[d] that to bet...In the one case, nobody cared...In the other case, guy could go to jail for 20 years.” ([18:20])

  • Clear regulatory and ethical divide between financially-motivated information trading in politics vs. sports.

• How Sports Leagues View Prediction Markets:

  • Leagues (NBA, MLB, NFL) maintain that state-regulated sportsbooks provide oversight and consumer protections—something lacking in the new prediction markets.

    “The leagues were among those who submitted these letters saying, here are our concerns.” ([20:38])

  • Only the NHL has entered formal agreements with prediction market platforms, providing official data and branding in exchange for closer oversight and monetary partnership.

  • The rationale: Better to be engaged and build guardrails than ignore an emerging sector.

    “The NHL is saying, look, this is here. And so we think it’s better to be business partners...if there’s a problem...we can find out what they’re doing to put guardrails in place…But, they have been the first among...the big team sport leagues in the US to go ahead and take that step.” ([25:37])

• The Regulatory Gray Area & State Pushback:

  • Major legal battles underway: 30+ state attorneys general consider prediction markets to be unauthorized, unlicensed gambling, while platforms assert federal (CFTC) jurisdiction.

    “This is being contested in federal court right now. And that is the question, right? Are these a new kind of thing that the Commodity Futures Trading Commission oversees...or are these...just sports betting under a different name?” ([23:01])

• Concerns About Manipulation and Integrity:

  • Many of the markets offered (not just in sports) are easy to manipulate by insiders (e.g., Academy Awards, referee decisions).

    • Randall Williams: “It offers Oscar nominations...things that feel like they are very easily manipulable because of the fact that if you are a voter for the Oscars...why not just put $10,000 on this?” ([26:33])

  • Sports leagues worry the same logic applies: If players, coaches, or insiders exploit non-public information, integrity is at risk.

    • Ira Budway: “…there was, I think, a logic in those [prediction] markets that this is what you want to happen, because the whole idea is to kind of figure out the probability of future events…But that’s something the league cannot tolerate.” ([27:53])

• Prediction Markets as a ‘Wild West’

  • No major prediction market scandals yet—likely because the industry is so new.
  • Federal government has provided little guidance; everyone is waiting to see how these forces will collide and be regulated.
    • Vanessa Perdomo: “It’s almost, it seems like almost early days of NIL, when everyone was like, it's the wild west. And we're trying to figure that out. This is kind of what that sounds to me right now.” ([29:32])

Segment 3: Athlete Health and College Sports Money

[32:44 – 45:02]

Key Points:

• Athlete Health and Expanding Schedules:

  • Focus on college football’s longer seasons, more games, less rest, and the growing toll on player health.
  • Dr. James Borchers (Chief Medical Officer, Big Ten):
    • Advocates for more bye weeks, smarter practice structures, and an overall look at athlete workload throughout the calendar.

    “I've been a big advocate for trying to work, you know, at least two bye weeks into the season to give some time for recovery and then also looking at the practice cadence during the season and...how much contact is occurring...how we can make certain...athletes have time to recover.” ([34:54])

• Cumulative Wear and Tear:

  • Modern youth sports, with higher levels of early specialization and year-round play, are contributing to injuries at college and pro levels.

    “You’ve got to look at what happens even in youth sports and the professionalization of youth sports, and that's why we're seeing athletes more broken today when they get to college or to the professional ranks.” ([37:39])

• The Resource Divide:

  • There are massive disparities between big-time college programs and smaller schools in terms of the quality and scale of medical support.

    “I think there's resource discrepancy you're talking about that you can even get down into smaller institutions where they just don't have the resources, like you said, that most Power 4 institutions have...” ([42:17])

• Advising on Private Equity Spending:

  • If private equity or pension funds get involved in college sports, Dr. Borchers says schools should prioritize athlete health and medical infrastructure.

    “I'd advise them to spend a lot more than they are spending in most cases. We know that the percentage that's spent on medical care and wellness care at a lot of places is very small…it's the one area where you can make the biggest impact in what happens with athletes.” ([44:10])

Notable Quotes & Memorable Moments

• On Information Asymmetry in Prediction Markets:

  • Ira Budway: “In the one case, nobody cared. In fact, they would see this as kind of how it's supposed to work. In the other case, guy could go to jail for 20 years.” ([18:20])

• Regarding Public Stadium Spending:

  • Max Adler: “Oklahoma City really stands out as an anomaly in respect to getting its voters to approve capital projects that are municipally funded.” ([13:18])

• On the Need for Health Investment:

  • Dr. James Borchers: “I'd advise them to spend a lot more than they are spending in most cases...that's invaluable. As you mentioned, keeping your athletes on the field and all the return that comes from that.” ([44:10])

• On the Regulatory ‘Wild West’:

  • Vanessa Perdomo: “This is kind of what that sounds to me right now. It's the wild, wild west and no one knows how it's gonna shake out.” ([29:32])

Timestamps for Key Segments

• Oklahoma City Sports Development: [03:45 – 14:42]
• Prediction Markets Focus Start: [17:19]
• Insider Trading in Non-Sports vs. Sports Prediction Markets: [18:20]
• Leagues and Prediction Market Oversight: [20:38 – 22:30]
• State vs. Federal Legal Battle: [23:01]
• NHL Partnership & Explanation: [25:23 – 26:33]
• Concerns Over Manipulability: [26:33]
• The 'Wild West' Analogy: [29:32]
• College Sports Athlete Health: [33:15 – 45:02]

Tone & Style

• Conversational, analytical, and at times humorous (“If the Jonas Brothers do tour in OKC, Vanessa, we are going.”).
• Language is accessible but detailed, reflecting the hosts’ and guests’ expertise in sports, finance, and business.

Conclusion

This episode offers a robust look at the evolving intersections of sports, finance, technology, and regulation. The main theme—why prediction markets are both a huge opportunity and a potential existential threat for sports leagues—is explored in depth, with sharp-eyed skepticism about both the upside and the risks. Meanwhile, the links between big money (whether in stadium deals or private equity) and athlete welfare get a thoughtful hearing, highlighting how the business of sports is about much more than what happens on the field.