The second an athlete steps on a court, they become more than a player – they're a chess piece suspended in air against a tough opponent: online sports betting. Just 8 years ago, online gambling was illegal nationwide. As of 2025, it’s a semi-legalized industry worth almost $17 billion.
The legal and moral permissibility of betting on games of chance has long been debated in South Carolina, which is one of 11 U.S. states that fully prohibits sports betting, whether online or in retail. The South Carolina Legislature has been debating bills aiming to legalize sports wagering, both in-person and online, in both Senate Bill 444 and House Bill 3625. Neither has progressed since 2025.
But money is still circulating. So, how do users keep it moving?
The answer lies in digital prediction markets, platforms that are legal under federal law and can operate because of technical distinctions from the average betting app. Unlike typical betting procedures, prediction markets operate on a “yes” or “no” basis. On apps like Kalshi, Underdog and PrizePicks, users can bet on the outcome of an event based on the probability of it occurring by purchasing event contracts.
Event contracts are the costs of each “yes” or “no” prediction, which fluctuate by the likelihood of the event occurring. The riskier the position, the cheaper the price, the bigger the payout – if it happens. Users choose how many contracts to purchase, essentially a form of betting, and thus, a loophole is born.
Today on Kalshi, users can say “yes” to their favorite college basketball player making a layup in the second half or even to California Governor Gavin Newsom being the 2028 Democratic nominee.
David*, a junior at USC, often uses prediction market apps to place bets, even on non-sports-related events. He cites an instance in which a rumor that Mark Wahlberg would attend the 2026 Super Bowl championship spread widely enough that users nationwide began betting "yes."
“At the last second, he wasn’t going to be at the Super Bowl, and it got so big that Kalshi had to refund [the money], but I cashed out my position," David said. "So, I lost money on this.”
While the risks of betting through prediction markets can be severe, the practice remains widespread. Many users are college students themselves.
At USC, online sports betting via prediction markets is increasingly common, and to David, using these apps feels ubiquitous among sports-watchers in his demographic.
“I don’t know anyone who doesn’t have Kalshi installed on their phone,” David said. He believes that the introduction of these apps has completely altered the experience of watching sports – money on the line garners more vested interest.
“I don’t even know how I was so emotionally invested as a kid, looking back,” David remarked.
For some games, he can resist placing money on the outcome. But often, that’s not the case. Easy access to betting has changed the landscape entirely.
“For some sports – honestly, for football – it's really tough to sit through a full game without just putting money on something,” he said. “I don’t even know how my grandfather gets so worked up about a sports team that he’s not involved with in the slightest, except for being a fan if he’s not financially invested.”
USC junior Curren McCabe, who uses apps like PrizePicks and Underdog to place bets, says that sports betting through prediction apps has been a regular activity among his friend group since he was in high school, with his friends referring him to join.
“One of my friends told me about [prediction market apps]," McCabe said. "They do referrals, so if you refer someone, then you can get an additional bonus on apps.”
Referrals, a common feature on prediction market betting apps, allow existing users to share a link or code with a friend. If they create an account, the app grants in-app rewards, often monetary bonuses, prizes or discounts. These rewards are highly effective in maintaining and growing these apps' user base — sometimes even more than traditional ad campaigns. Across the internet gambling industry, referral programs generate 40-60% of new user acquisitions, contributing to online betting's immense popularity.
Like David, McCabe believes that online betting and its perks have permeated college sports-watching culture, but to him, not necessarily in a negative way. Sports betting makes it easier for them to watch sports more often, as it gives them more reason to care. For McCabe, it’s widely normalized among his friend group.
“If you’re watching sports on the regular, then you’re most likely gambling at least a little bit,” said McCabe. “It just made watching the game more entertaining because on a regular night, it’s just kind of boring.”
While they do bet on random teams, this practice does extend to USC athletes. David and McCabe both discuss betting on the football team, some even involving USC quarterback LaNorris Sellers.
“I’ve [bet on] some Carolina football, and I’ve bet on LaNorris. I think if we lost one of them, I was pretty upset because it makes it a kind of double loss,” McCabe said. “I’m either double happy or double mad because it’s our team.”
David shared this perspective, stating that he and his friends bet at football tailgates. Like McCabe, placing money on USC teams makes student users more invested in the outcome. To David, whether or not this is a positive change is ambiguous.
“I don’t know if that changes it for the better or worse. I am definitely more invested if I have money on it,” David said.
According to David and McCabe, it’s common among young adult sports watchers in their social groups and affects their emotions and investment in their games. It feels indistinguishable from the traditional act of gambling from a psychological standpoint.
And South Carolina lawmakers agree. A spokesperson for Governor Henry McMaster told the Post and Courier that prediction markets appear to be the exact same as betting to him and other legislators – it’s still illegal. Despite this, they haven’t made any arrests. Several states across the nation have expressed this sentiment and have created their own acts, some even filing charges against Kalshi.
Despite these reactions, Kalshi and similar apps are federally protected by the Commodity Futures Trading Commission, which regulates derivatives and prediction markets. The loophole created in betting stipulations allows users like David and McCabe to keep betting.
“You’re going to find a way to do it if you want to do it. It’s not really a big hampering,” said David of SC lawmakers’ condemnation of prediction markets. He argues that bans on regular sports betting are arbitrary now that apps like Kalshi, PrizePicks and Underdog exist.
Introductory offers of “free money” entice new users, and special offers keep them betting their money. For college students, these are the fundamentals of betting, and it’s easy to misunderstand the financial risks. With the appeal of these offers, David and McCabe both feel that they are designed to keep users engaged, like a game to be played.
“If you refer friends, you get money, and it’s clear that the whole goal is they’re optimizing the app’s [user interface] to gameify it,” David said.
It’s hard to know what the future of sports watching and online betting will look like in South Carolina, especially with its growing popularity among young adults. Prediction apps now extend beyond sports – users can bet on the outcomes of geopolitical events, such as diplomatic developments in Iran. With the appeal of these apps, it can also be difficult to gauge what kind of effects betting will have, psychologically and financially.
“Don’t put any money that you aren’t willing to lose on that because it can really affect you mentally,” expressed David. “It’s a slippery slope.”
*Name changed for anonymity.
