As the NBA trade deadline approached in early February, fans waited anxiously to see if star player Giannis Antetokounmpo would be moved to another team. The buzz around the Milwaukee Bucks forward, who could raise the title hopes of any franchise, reached a point where on the platform Kalshi users could place money on whether or not he would be traded.

The window to bet on Antetokounmpo’s future closed on February 5th, and a total of $23 million was placed on the wager. To the surprise of some, Antetokounmpo did not end up getting traded. An even bigger surprise came the following day when Antetokounmpo announced that he was partnering with Kalshi and becoming a shareholder. “I like to win. It’s clear to me Kalshi is going to be a winner and I’m excited to be getting involved,” he said in a statement.

This timing angered fans on social media, some of whom accused Antetokounmpo of intentionally stirring trade rumors to drive traffic on the bet. Antetokounmpo has not publicly responded to this backlash. The controversy also comes as some are worrying that prediction markets could exacerbate conflict-of–interest concerns in a sports world already beset by widespread betting scandals.

“One of the things in terms of the ethical issues [of the partnership] is the timing,” said Melinda Roth, a professor of business, finance, and sports law at Washington and Lee University. “The timing really puts a spotlight on how prediction markets work, who is allowed to buy contracts, and who has inside information.”

Prediction markets are platforms where users can wager on the outcome of a variety of future events, whether it’s politics, pop culture, and increasingly, sports. People can put money on which movie will win best picture at the Oscars, or whether the Federal Reserve will raise interest rates in March.

Antetokounmpo has not violated any of the NBA’s rules, as his shares in Kalshi are reportedly less than 1% of the platform’s value, in keeping with the league’s policies. The prediction market giant is valued at about $11 billion, meaning that the NBA star’s investment could be up to about $110 million.

NBA commissioner Adam Silver called Antetokounmpo’s stake in Kalshi a “miniscule investment” when interviewed about it two weeks ago. When asked for further comment, the NBA referred Fortune back to the response Silver gave during that press conference.

Kalshi and Octagon, the agency that represents Antetokounmpo, did not respond to requests for comment.

The prediction market fever pitch

One of the most popular NBA players endorsing Kalshi is the latest indicator of just how mainstream prediction markets have become. On Super Bowl weekend, for example, the two largest prediction market platforms, Kalshi and Polymarket, registered nearly $1.2 billion in trading volume.

The prediction market industry was considered niche until the 2024 election, when platforms like Kalshi correctly pointed to President Donald Trump’s victory in contrast to other major polls. Trump, whose son Donald Trump Jr. is a strategic advisor to Kalshi and on the advisory board of Polymarket, has overseen an administration that has been largely supportive of prediction markets.

The rise of Kalshi and its main competitor Polymarket is creating tense competition with traditional sportsbooks, like FanDuel and DraftKings. An analyst at the investment bank Citizens estimates that prediction markets are taking about $8 billion each year from traditional gambling companies. Prediction markets differ from traditional sportsbooks because they are a peer-to-peer platform for event contracts, whereas in sportsbooks, users place bets against the house.

Other major financial companies, like Robinhood and Coinbase, also have prediction market platforms. FanDuel and DraftKings, the two major sportsbooks, launched their own prediction markets platforms in December.

Antetokounmpo’s embrace of Kalshi comes as prediction markets face increased scrutiny about their potential for insider trading. During the Super Bowl, an anonymous trader on Polymarket suspiciously won about $17,000 by cashing in on almost all of their 17 bets on what would happen during the halftime show. Similar questions about Polymarket were raised in January when a bettor won more than $400,000 by correctly predicting Nicolás Maduro’s ouster. Polymarket did not immediately respond to a request for comment.

A few days ago, Kalshi cracked down on insider trading, fining and suspending a former California gubernatorial candidate and a MrBeast employee for suspicious activity on its platform.

Prediction markets and traditional sports betting are regulated differently. Wagers on prediction markets are considered to be event contracts and are federally regulated by the Commodity Futures Trading Commission. Traditional sportsbooks, on the other hand, are regulated as gambling at the state level.

An evolving sports betting landscape

The optics of Antetokounmpo’s tie-up with Kalshi are also not helped by the recent betting scandals plaguing the NBA. In October, Miami Heat player Terry Rozier and Portland Trail Blazers head coach Chauncey Billups were arrested for charges related to illegal sports betting and rigged poker games, respectively. And in 2024, another player, Jontay Porter, pleaded guilty to charges that he manipulated his play to help co-conspirators win bets. He received a lifetime ban from the NBA for his actions.

Professional basketball is not the only sport grappling with betting scandals. In November, the Department of Justice accused MLB pitcher Emmanuel Clase of rigging pitches to ensure that gamblers won bets. There have also been a litany of other sports betting scandals, in the NFL and in the NCAA, since the Supreme Court struck down a federal ban on sports betting in 2018.

“We let a genie out of the box and we don’t know what that genie is going to do,” said Jay Zagorsky, a professor at the Boston University Questrom School of Business, about the rise of prediction markets and its effect on sports betting for the masses. “The genie is now accessible to far more people, with far less regulation and safeguards.”

A battle is brewing between states and prediction markets, and that battle is heading to court. Kalshi is now facing 19 lawsuits, including from state gambling commissions and attorneys general, as some states call prediction markets “unlicensed sports gambling.”

Michael Selig, the Trump-appointed chair of the CTFC, is fiercely defending the prediction market industry. In a video posted to X last week, he said prediction markets, “provide useful functions for society by allowing everyday Americans to hedge commercial risks.”

Two weeks ago, at the NBA’s All-Star Weekend, Portland Trail Blazers’ player Damian Lillard had just won the 3-point contest and saw Antetokounmpo in the stadium tunnel right after his victory. The two embraced and Lillard asked him, “Did you place a … on Kalshi?” Likely mindful of optics, he did not say the word bet out loud.