NCAA Sues DraftKings, Targets Prediction Markets During March Madness

The NCAA launched an unprecedented dual offensive during the opening week of the 2026 NCAA Tournament: a trademark infringement lawsuit against DraftKings filed March 20 in the Southern District of Indiana — the first time the NCAA has ever sued a sportsbook — combined with an escalating lobbying campaign urging the CFTC to suspend college sports prediction markets entirely. Together, these actions represent the most aggressive legal and regulatory assault on the sports betting industry by any major sports organization since the Supreme Court struck down PASPA in 2018. The timing is deliberate: the tournament generates $1.02 billion in broadcast rights alone (crossing the billion-dollar threshold for the first time), the AGA projects $3.3 billion in legal sportsbook handle, and Kalshi processed roughly $600 million in college basketball trades on the tournament’s first day. The NCAA is fighting to control how its most valuable product is monetized by an industry it refuses to embrace — while simultaneously depending on that industry’s engagement to sustain record-breaking viewership.

NCAA v. DraftKings: the first sportsbook trademark lawsuit in history

The complaint, filed Friday evening at 7:54 PM ET, accuses DraftKings of deliberately embedding the NCAA’s federally registered trademarks — March Madness®, Final Four®, Elite Eight®, and Sweet Sixteen® — into its betting menus, promotional graphics, and marketing across its consumer-facing websites and mobile applications. Screenshots of DraftKings’ wagering platforms were included as exhibits, documenting what the NCAA characterizes as a calculated effort to “trade on — and usurp — the immense goodwill, recognition, and consumer trust” of the NCAA’s marks “at the precise moment of peak public attention.”

The NCAA says it contacted DraftKings before filing and that the company removed some “egregious” uses but maintained it has the right to use the marks on its betting apps. As of Saturday morning March 21, the DraftKings app still displayed references to March Madness, Final Four, and Elite Eight alongside betting options. The NCAA has requested a hearing on its emergency TRO motion by March 26, “or as soon as possible thereafter,” and asked the court to rule before the men’s Sweet Sixteen begins March 27 and the women’s third round begins March 28.

This case is the first formal legal action the NCAA has ever taken against a sports betting company over trademark use. The NCAA holds over 70 registered trademarks related to its basketball tournaments, including defensive registrations like “March Mayhem” and “The Big Dance.” Its enforcement history is prolific — the organization files 25+ opposition or cancellation actions per year — but its prior targets have been car dealerships (“Markdown Madness”), restaurants (the Boston Globe’s “Munch Madness”), video game developers, and even the U.S. Marine Corps (“Sousa’s March Mania”). Going after a sportsbook directly is a new escalation.

ESPN’s reporting noted a critical wrinkle: “Other sportsbooks, in addition to DraftKings, were displaying March Madness and other terms on their betting apps Friday night.” DraftKings was singled out despite not being the only operator using the marks. The most plausible explanation is strategic: DraftKings is the largest pure-play U.S. online sportsbook, making it the highest-profile target to establish legal precedent. A win against DraftKings would put every other operator on notice.

DraftKings’ fair use defense faces an uphill battle

“DraftKings does not use the term March Madness as a trademark, but rather uses it in plain text and as a fair use in the same manner that other tournaments are displayed, such as the NIT, in order to accurately identify the different tournaments and their respective games. This is protected speech under the First Amendment and is not a violation of any brand’s trademark.”
— DraftKings spokesperson

The legal framework for nominative fair use, established in New Kids on the Block v. News America Publishing (9th Cir. 1992), requires three conditions: the product cannot be readily identified without the mark; only so much of the mark is used as reasonably necessary; and the use does not suggest sponsorship or endorsement. DraftKings’ argument has surface appeal — a sportsbook listing “March Madness” to identify which tournament the lines belong to is functionally similar to a TV guide listing the “Super Bowl.”

But the argument has significant weaknesses. IP law analysts at Lexology noted that while “there’s a case to be made” for nominative fair use, “it would be easier to avoid using such trademarks altogether.” The Martin IP Law Group flagged the sponsorship question as the critical vulnerability: using trademarks in “betting menus, promotional graphics, and marketing publications” goes beyond neutral identification. The NCAA is not arguing that DraftKings can’t reference the tournament; it’s arguing that DraftKings’ manner of use — prominent, commercial, embedded in promotional materials — creates a false impression of endorsement.

“If the NCAA did not actively police the use of its marks by unauthorized companies, advertisers might not feel the need to get a license.”
— Bruce Siegal, former NCAA in-house counsel, now at Greenspoon Marder

The Super Bowl analogy is instructive. The NFL aggressively polices “Super Bowl,” forcing companies to say “The Big Game.” Nobody claims this is a First Amendment violation — it’s settled trademark law. DraftKings’ comparison to the NIT actually undermines its own case: the NIT’s trademarks are owned by the NCAA too, but “NIT” carries negligible commercial value, so the NCAA has little incentive to enforce. “March Madness” is a billion-dollar brand.

How other platforms handle the NCAA’s trademark minefield

The NCAA’s decision to target DraftKings exclusively raises the question of why Polymarket, Kalshi, and other sportsbooks were spared. The answer is strategic: DraftKings is the largest pure-play U.S. online sportsbook and the one that explicitly “maintained it has the right to use the NCAA’s trademarks” — making it the ideal target to establish legal precedent. A classic trademark enforcement strategy: establish precedent against the biggest player, then enforce downstream.

Prediction markets’ trademark avoidance also reflects their broader defensive posture. Suing Kalshi or Polymarket over trademarks would force the NCAA to implicitly acknowledge them as commercial betting platforms — potentially complicating its separate argument to the CFTC that these platforms should be suspended entirely. The DraftKings case “is not a morality based anti-gambling lawsuit from the NCAA. The lawsuit is only about trademark infringement.”

Baker’s CFTC lobbying: two letters, one CBS interview, zero response

NCAA President Charlie Baker’s campaign against prediction markets has been building for months. His January 14 letter to CFTC Chair Michael Selig — a three-page document available on the NCAA’s servers — “implored” Selig to suspend all collegiate sport prediction markets and outlined seven specific safeguards missing from prediction platforms: age restrictions (platforms allow 18-year-olds, while most states require 21 for gambling), advertising restrictions near campuses, integrity monitoring with geolocation tracking, national governing body involvement in market approval, prop market restrictions, anti-harassment measures, and harm reduction resources.

The March 18 letter escalated with a four-page filing submitted as a formal CFTC public comment, containing 12 specific policy recommendations: suspicious activity reporting, geolocation tracking, elimination of college player prop markets, prohibited trader lists, minimum trading age increase to 21, prohibition of NIL advertising deals with prediction markets, governing body collaboration on permissible markets, problem gambling education, anti-harassment protections, clear market language requirements, substantial penalties for noncompliance, and mandatory integrity monitoring comparable to licensed sportsbooks.

“If we don’t get anywhere with them we’ll explore other options to deal with that.”
— Charlie Baker, NCAA President, CBS Mornings interview (March 19, 2026)

Baker described “problem number one” as the age gap (18 vs. 21) and “problem number two” as prediction markets not collecting “the kind of data that you’re required to collect if you’re a sportsbook.” He referenced “thousands and thousands” of abusive messages directed at athletes, coaches, and officials during championship play.

CFTC Chair Selig has issued no public response to either letter. His posture has been consistently pro-prediction market: in February 2026, the CFTC formally withdrew the Biden-era proposed rulemaking that would have prohibited certain event contracts, calling it “the prior administration’s frolic into merit regulation.” When Arizona filed criminal charges against Kalshi on March 17, Selig posted on X that it was “a jurisdictional dispute and entirely inappropriate as a criminal prosecution.” He is currently the sole sitting commissioner with four seats unfilled, which limits the agency’s capacity for major regulatory action but concentrates his influence over its direction.

The CFTC did take two steps on March 12 that partially address Baker’s demands: a staff advisory reminding prediction market exchanges to engage with sports governing bodies when developing market terms, and an Advance Notice of Proposed Rulemaking with a 45-day comment period. But these are procedural, not substantive. The CFTC is building a regulatory framework that positions federal jurisdiction as supreme — the opposite of what Baker wants.

The timeline: how the NCAA’s offensive came together

The point-shaving indictment the NCAA can’t stop citing

Baker’s lobbying draws heavily on a federal indictment unsealed January 15 in the Eastern District of Pennsylvania. The charges are sweeping: 26 individuals, a scheme involving more than 39 players on more than 17 Division I men’s basketball teams, with fixers attempting to manipulate more than 29 games between September 2022 and February 2025. The full scope of the NCAA point-shaving scandal continues to unfold as investigations progress.

The 17 programs named include Nicholls State, Tulane, Northwestern State, Saint Louis, La Salle, Fordham, SUNY Buffalo, DePaul, Robert Morris, Southern Miss, North Carolina A&T, Kennesaw State, Coppin State, New Orleans, Abilene Christian, Eastern Michigan, and Alabama State. The defendants include former NBA/CBA player Antonio Blakeney, who allegedly began fixing games in the Chinese Basketball Association before expanding to NCAA competition. Players received $10,000–$30,000 per game to underperform, ensuring their teams didn’t cover point spreads, particularly first-half spreads. Fixers placed large wagers — sometimes exceeding $400,000 on a single game — through traditional sportsbooks. Charges include bribery in sporting contests (up to 5 years), conspiracy to commit wire fraud (up to 20 years), and wire fraud (up to 20 years).

Here’s the critical nuance the NCAA’s framing obscures: the point-shaving scheme operated entirely through traditional sportsbooks, not prediction markets. The indictment involves bets placed at regulated operators. Baker uses the case to argue that prediction markets, with fewer safeguards, would be even more vulnerable to manipulation — a reasonable inference, but one that also underscores that regulated sportsbooks themselves were insufficient to prevent the scheme. Ironically, Kalshi’s college basketball trading volume increased after the indictment was publicized, with January 16 setting a single-day record at the time.

The prediction market battleground: Kalshi, Arizona, and $50 billion

The NCAA’s two-front war occurs against a backdrop of explosive prediction market growth and escalating state enforcement — a dynamic explored in depth in our coverage of the prediction market wars. Kalshi has processed more than $50 billion in trading volume over the past 12 months, with 85% tied to sports event contracts and roughly 15% to college basketball specifically. In February 2026 alone, men’s college basketball trading hit $2.27 billion on Kalshi — exceeding the $1.8 billion wagered on the NFL that month, which included the Super Bowl. On the tournament’s first day (March 20), Kalshi processed approximately $600 million — its second-biggest day ever, behind only Super Bowl Sunday. The company’s valuation has reached $22 billion, doubling from December 2025, fueled by a $1 billion funding round led by Coatue Management.

Arizona escalated the state-level battle on March 17 — the day before Baker’s second CFTC letter — by filing the first-ever criminal charges against a prediction market company. Attorney General Kris Mayes filed a 20-count misdemeanor complaint in Maricopa County Superior Court accusing Kalshi of operating an unlicensed wagering business, accepting bets on professional and college sporting contests, and election wagering (including bets on the 2028 presidential race and 2026 Arizona gubernatorial race). Penalties include fines of $10,000–$20,000 per count, potential asset forfeiture, and possible jail time. Gambling attorney Daniel Wallach noted that “Arizona could be the first of many states to bring criminal charges against Kalshi.” More than 30 states, including Nevada, Massachusetts, and Michigan, have already taken legal action against prediction markets through civil lawsuits or cease-and-desist letters.

“I’ve always viewed this as eventually going to the Supreme Court. It’s just a matter of when.”
— Andrew Kim, Goodwin Proctor partner specializing in prediction market litigation

FanDuel Predicts, backed by Flutter Entertainment’s partnership with CME Group, now operates in all 50 states with sports contracts available in 16–18 of them. DraftKings Predictions is live in 38 states with sports in 17. Kim told ESPN the jurisdictional question could reach the Supreme Court by 2027 or 2028, unless an emergency ruling comes sooner.

The NCAA’s three-front strategy

A billion-dollar brand the NCAA won’t let anyone touch

The financial stakes explain the intensity. The NCAA’s CBS/Turner broadcast deal pays $1.02 billion for the 2026 men’s tournament — a 2.5% increase from $995 million in 2025 and the first time the single-event rights crossed $1 billion. Total NCAA revenue reached $1.57 billion in fiscal 2024–2025, with $1.12 billion from media deals. The women’s tournament is now anchored by an 8-year, $920 million ESPN deal (~$115M/year).

The betting ecosystem inflates this value. CivicScience data shows betting intent specific to March Madness is up 33% in 2026 among Americans 21+ in legal sports betting states. Tournament viewership interest jumped 8 points year-over-year (44% of adults plan to follow the men’s tournament, up from 36% in 2025). ESPN bracket participation has grown from 17.3 million in 2019 to 27.7 million in 2025, a trajectory that closely tracks sports betting legalization. A Siena Research Institute survey found 25% of Americans plan to bet on tournament games through online sportsbooks.

DraftKings stock sat at $23.67 at Friday’s close, down 4.98% on the day — though this was driven by broader market weakness (the Nasdaq fell 2.01% and VIX spiked 11.31%) rather than the lawsuit, which was announced after market close. DraftKings has been under pressure since slashing its FY2026 EBITDA guidance from $1.4 billion to $700–900 million in February, prompting J.P. Morgan to warn the revision was “more a tacit admission of industry growth concerns than a beatable target.” The broader DraftKings and Flutter stock crash reflects an industry under mounting pressure. Flutter Entertainment, FanDuel’s parent, is down 47.5% year-to-date and 55.5% over the past year after its own disappointing earnings, with the CFO noting FanDuel experienced a “moderation in customer activity” partly because “customers lost too much money.”

The AGA’s internal fracture adds another layer: DraftKings, FanDuel, and Fanatics all left the AGA after launching their own prediction market platforms, splitting the traditional sportsbook coalition at the exact moment the NCAA is mounting its multi-front campaign. The AGA estimates states have lost $600 million+ in tax revenue from unregulated prediction market wagering.

The state-level prop bet campaign gains momentum

The trademark lawsuit and CFTC lobbying are two prongs of a broader NCAA offensive. The third is a state-by-state campaign to ban individual college athlete prop bets. Four states — Ohio, Louisiana, Maryland, and Vermont — have already banned them since 2024, with Baker personally contacting regulators. Additional states with existing bans include Arizona, Colorado, Florida, Illinois, Massachusetts, New York, Oregon, Pennsylvania, Tennessee, and Virginia.

Colorado’s Senate Finance Committee approved SB 26-131 on March 17 by a 5-4 vote, which would eliminate all prop bets (not just college), prohibit credit card deposits, limit deposits to 5 per 24 hours, ban push notifications soliciting bets, and restrict sports betting ads from 8am–10pm and during live events. Maryland’s House passed HB 518 by a 132-0 vote on March 19 to codify its existing regulatory ban. Missouri’s Gaming Commission, however, rejected the NCAA’s request to ban college player props, illustrating that the campaign faces resistance too.

In Congress, the bipartisan Event Contract Enforcement Act was introduced March 6 by Reps. Blake Moore (R-UT) and Salud Carbajal (D-CA). The bill would prohibit event contracts on sports unless a state specifically opts in — reversing the current default where prediction markets operate unless a state actively bans them. Rep. Dina Titus (D-NV) introduced a separate bill (HR 7477) that would outright prohibit CFTC-regulated exchanges from listing sports or casino-style gaming contracts. Sens. Richard Blumenthal (D-CT) and Andy Kim (D-NJ) introduced legislation banning insider trading on prediction markets and clarifying that they are not exempt from state oversight.

What this means if you’re betting March Madness right now

For bettors using DraftKings: If the TRO is granted, the impact would be cosmetic, not functional. DraftKings would need to remove “March Madness,” “Sweet Sixteen,” “Elite Eight,” and “Final Four” from its betting menus and promotional materials — likely replacing them with “NCAA Tournament,” “Round of 16,” “Regional Finals,” and “National Semifinals,” similar to how advertisers use “The Big Game” instead of “Super Bowl.” Your ability to place bets on tournament games would be completely unaffected. The odds, lines, and markets would remain identical.

For bettors using Kalshi: The NCAA’s CFTC lobbying has not yet produced regulatory action. CFTC Chair Selig’s pro-prediction market stance makes a near-term suspension unlikely. Arizona’s criminal charges affect Kalshi’s operations in that state specifically but don’t immediately threaten national access. The larger risk is medium-term: Andrew Kim estimates the jurisdictional question could reach the Supreme Court by 2027–2028. If states prevail, Kalshi would need state-by-state gambling licenses, potentially restricting access in many jurisdictions.

For bettors using Polymarket: The international platform is least affected by any of these actions. It operates outside CFTC jurisdiction and has carefully avoided “March Madness” branding while still using some tournament round names. Its primary risk is Polymarket’s broader regulatory exposure if the prediction market jurisdictional dispute resolves in favor of states.

The paradox at the heart of the NCAA’s strategy

The NCAA is simultaneously suing sportsbooks for using its brand to sell betting, lobbying regulators to shut down prediction markets that compete with sportsbooks, and pushing states to restrict the types of bets sportsbooks can offer on college sports. It is fighting every participant in an industry war where sportsbooks and prediction markets are also fighting each other — a dynamic we tracked in our analysis of the sportsbooks vs. prediction markets power shift — while generating over $1 billion from a tournament whose cultural relevance is increasingly fueled by that same industry’s engagement.

The strategic logic, however, is more coherent than it appears. The NCAA’s core position is not anti-betting per se; it is anti-association. It wants to benefit from betting-driven viewership without any formal or implied endorsement. The trademark lawsuit prevents sportsbooks from implying NCAA sponsorship. The CFTC lobbying targets an unregulated channel that lacks integrity safeguards. The prop bet campaign addresses the bet type most directly linked to player harassment and corruption. Each front serves a distinct purpose.

The contradiction lies in the NCAA’s April 2025 Genius Sports deal, which for the first time officially distributed NCAA data to licensed sportsbooks — a “notable departure” from its prior arms-length posture. The deal requires participating sportsbooks to ban “high-risk proposition bets” and cooperate with integrity investigations. This creates a two-tier system: cooperating sportsbooks get official data and (implicitly) trademark tolerance, while non-cooperating operators get sued. DraftKings, notably, has been expanding aggressively into prediction markets through its Railbird Exchange acquisition — putting it on both sides of the industry divide the NCAA is exploiting.

Whether this multi-front strategy is sustainable depends on outcomes that remain uncertain. The TRO hearing could come as early as March 26. The CFTC’s comment period closes April 30. Arizona’s Kalshi case has an April 3 hearing. The Supreme Court may weigh in by 2027. What’s clear is that March Madness 2026 isn’t just the biggest betting event in American sports — it’s the opening round of a legal tournament that will define the boundaries between sports, gambling, and intellectual property for years to come.

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Sources

• NCAA Files Trademark Infringement Lawsuit Against DraftKings — NCAA Official Statement
• Advance Notice of Proposed Rulemaking on Event Contracts — U.S. Commodity Futures Trading Commission
• 26 Individuals Charged in Point-Shaving Scheme — U.S. Department of Justice, Eastern District of Pennsylvania
• Attorney General Mayes Files Criminal Charges Against Kalshi — Arizona Attorney General’s Office
• March Madness 2026 Betting Projections — American Gaming Association
• Event Contract Enforcement Act — U.S. Congress, 119th Session