Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Truist Securities’ Barry Jonas on August 31 looked at court rulings on prediction markets:
“On Friday, the 9th Circuit ruled against Kalshi (Private), essentially keeping its sports predictions contracts out of Nevada, and potentially driving more state bans. While the 4th/6th circuits have yet to weigh in, we now have a split court on the topic between the 9th and 3rd (New Jersey), which could lead to a Supreme Court review. We could still be looking at ~10-22 months for some resolution though. Both Buy rated DraftKings/Flutter rallied late Friday on the news, and as we highlighted in our 2026 Outlook, we could see additional upside assuming both can continue to navigate the complex landscape as both OSB and prediction market operators.”
Dan Politzer of J. P. Morgan on August 28 also examined prediction markets and their judicial standing:
“Shares of OSB operators DraftKings and Flutter are trading higher this afternoon after U.S. Court of Appeals for the Ninth Circuit ruled unanimously against Kalshi (i.e., 3-0), with the opinion stating that “the substance of sports event contracts offered on Kalshi’s DCM is sports gambling, regardless of whether Kalshi calls them swaps. Of note, the Ninth Circuit’s decision conflicts with the Third Circuit Court’s more favorable ruling that the Commodities Futures Trade Commission has exclusive jurisdiction over sports-related event contracts.
“With circuit court opinions split on the regulatory status of sports predictions (Fourth Circuit appeal still pending), the issue could be pushed to SCOTUS. Near-term, building legal momentum and geofencing of Kalshi could support DraftKings/Flutter operating metrics (e.g., handle in states where Kalshi is restricted, such as Massachusetts, Nevada, Michigan and Washington), while longer-term, formal regulatory clarity a SCOTUS would remove a major overhang.”
David Katz of Jefferies on August 27 wrote about Sportradar’s agreement with Polymarket:
“Under the expanded U.S. agreement, Sportradar will provide Polymarket with sports data, live odds, AV content, fan engagement, marketing, and integrity services across additional global properties, including the Bundesliga, EuroLeague Basketball, Chinese Basketball Association, National Basketball League, Tennis Grand Slams, and UTR (tennis) pro events. The partnership previously covered the ATP Tour, MLB, NFL, MLS, and UFC. Management indicated both parties expect to further expand the relationship with additional products and markets. Financial terms of the deal were not disclosed.”
Texas Capital Securities’ David Bain on August 28 looked at Double Down Interactive:
Since May 8, Double Down Interactive’s stock has closed above DoubleU Games April 27, $11.25 per share all-cash acquisition offer. Clearly, investors believe Double Down is worth more than DoubleU’s offer price, in our view, and we think 1) DoubleU will increase its offer to achieve a shareholder approved transaction; 2) An alternative buyer could emerge with a higher offer and/or 3) Double Down’s valuation augments over time should a deal not occur. While we are not privy to alternative M&A discussions, Double Down would be a strong asset for several strategic buyers, in our view.”
