Exposure analystEXPOSEDbiggest if it happens: +$150M a year (+24.2% of profit)
Policy analystWEAK LINKfor results of 1% of profit or more, who wins moves the chance by 7 points at most
Market analystPRICED7 markets on Kalshi and Polymarket, 1 thin
Red TeamCAUTION14 flags to read
Risk Officer
Election risk
MEDIUM
If Healey wins (95% on Kalshi), the chance that Massachusetts legalizes online casino games is 7%, vs 0% if Minogue wins. For DraftKings: +$80.0M a year (+12.9% of profit).
Policy risk
HIGH
Polymarket puts 18% on: Congress bans sports contracts on CFTC-regulated prediction markets in 2026. For DraftKings: +$150M a year (+24.2% of profit).
High = share of profit × chance (policy) or × election swing (election) of at least 2% of profit; Medium at least 0.5%.
Share card
Exposure analyst
Where the profit comes from and what a government can move.
Base: FY2025 Adjusted EBITDA $620M sourceverified Full profit structure: structure.md in this folder.
Locked in regardless of the election
State gaming taxes (~$1.6B a year, estimated) are set by state budget bills; no Nov 3 market prices a tax-rate change in any DraftKings state, and the policy book has no tax-rate rows for NY, PA, NJ, MI, IL or OH
2025 state tax hikes already enacted: NJ online rate to 19.75%, Illinois per-wager fee (Jul 2025), Maryland to 20%, Louisiana to 21.5%
Federal wagering excise tax (0.25% of handle, ~-$134M a year, estimated): no market prices repeal
NJ and VA governors were elected in 2025; Ontario is provincial
Policy analyst
What each winner would do, how, and the chance it happens if they win.
Policy book: built here, last edited 2026-10-27, 197 contests, fingerprint f97e319e0772. Chances come from historical rates (an upper bound for two years), not forecasts.
Market analyst and Risk Officer
Each market, its price, and the yearly profit change if it resolves.
Law banning sports prediction markets enacted in 2026?
Yes if a law banning CFTC-regulated prediction markets from offering sports contracts, or putting them under state gambling regulation, is signed by Dec 31, 2026. · law-banning-sports-prediction-markets-enacted-in-2026
If Congress bans sports contracts on CFTC-regulated prediction markets in 2026
+$150M a year
+24.2% of Adjusted EBITDA · range +$50.0M to +$300M estimated
Market price by Dec 31, 2026
Polymarket18%
$21,034 traded
chance 18%election swing 0.00meaningful
How this number is built
Management: core business ~$1.0B Adjusted EBITDA in 2026 vs guidance $700-900M, the gap being Predictions spend = $100-300M; a ban closes the sports product and stops most of that spend: ~+$150M central, +$50M if some spend continues on non-sports contracts, +$300M at the top of the gap
New York iGaming at Pennsylvania-like spend per adult ~$3B market x DraftKings ~17-20% iGaming share = $0.5-0.6B revenue x ~25% EBITDA margin after tax and marketing = $100-150M a year at maturity; low case $60M if taxed at 30%+
Resolves to the party of the person inaugurated as Ohio governor after the 2026 election. · GOVPARTYOH-26
If Ohio legalizes online casino games
+$100M a year
+16.1% of Adjusted EBITDA · range +$50.0M to +$150M estimated
Who wins (chance the policy follows is estimated)
Amy Acton (D)
82%
to win
Kalshi82%
1,839,642 contracts
If they win: 5% chance it happens
open to regulating and taxing online casino games; no bill or rate · vague · source
Vivek Ramaswamy (R)
18%
to win
Kalshi18%
3,063,996 contracts
If they win: 0% chance it happens
no stated position · none
Policy book OH-governor.md: Acton iGaming row vague 0.05; Ramaswamy has no row (0). The Republican legislature would still have to pass it.
chance 4%election swing 0.05below the bar
How this number is built
Pennsylvania iGaming $3.46B / ~10.4M PA adults = ~$330 per adult x ~9.2M Ohio adults = ~$3.0B market x DraftKings ~17% iGaming share = ~$0.5B revenue x ~20% EBITDA margin after tax and marketing = ~$100M a year at maturity (50-150M)
Resolves to the party of the person inaugurated as Massachusetts governor after the 2026 election. · GOVPARTYMA-26
If Massachusetts legalizes online casino games
+$80.0M a year
+12.9% of Adjusted EBITDA · range +$40.0M to +$120M estimated
Who wins (chance the policy follows is estimated)
Maura Healey (D)
95%
to win
Kalshi95%
523,467 contracts
If they win: 7% chance it happens
opposes iGaming (competes with the state's online lottery); p is the chance it still becomes law · block: veto · source
Mike Minogue (R)
5%
to win
Kalshi5%
1,948,060 contracts
If they win: 0% chance it happens
no stated position · none
Policy book MA-governor.md: Healey block: veto 0.07; Minogue has no gaming row (0). Copied unchanged; see weak links.
chance 7%election swing 0.07meaningful
How this number is built
~$330 iGaming spend per adult (PA) x ~5.6M Massachusetts adults = ~$1.9B market x DraftKings ~17% iGaming share = ~$0.32B revenue x ~25% EBITDA margin = ~$80M a year at maturity (40-120M)
Will the cap on gambling loss deduction be changed?
Yes if a bill that removes or changes the gambling tax provision in the One Big Beautiful Bill Act becomes law before Jan 1, 2027 (the most traded rung; later rungs to 2029 trade at 0.21-0.46). · KXGAMBLINGREPEAL-26JAN
If Congress changes or removes the 90% cap on gambling-loss deductions before 2027
+$25.0M a year
+4.0% of Adjusted EBITDA · range +$13.0M to +$51.0M estimated
Market price before Jan 1, 2027
Kalshi19%
377,674 contracts
chance 19%election swing 0.00meaningful
How this number is built
Gaming revenue $5.63B (Sportsbook $3.83B + iGaming $1.80B) x 1% of play from high-volume bettors restored (range 0.5-2%) = $56M (28-113M) x ~45% flow-through after ~25-30% gaming tax and variable costs = ~$25M a year (13-51M)
Will Online Sports Wagering Regulation Initiative pass?
Yes if Nebraska's Initiative 441 (online sports wagering regulation: two skins per racetrack, 20% tax) passes. The companion constitutional authorization (440, KXSTATEBALLOTMEASURE-NE26-OSWA) trades at about the same price; both are needed. · KXSTATEBALLOTMEASURE-NE26
If Nebraska voters legalize online sports betting
+$5.0M a year
+0.8% of Adjusted EBITDA · range +$2.0M to +$10.0M estimated
Market price Nov 3, 2026
Kalshi64%
383 contracts thin
chance 64%election swing 0.00below the bar
How this number is built
Fiscal note for the similar LB 421 (20% tax): $20.4M tax in year 4 / 20% = ~$100M online GGR at maturity (sponsor study: $87M tax over 5 years) x DraftKings ~25% national OSB share = $25M revenue x ~20% EBITDA margin after tax, market access and marketing = ~$5M a year (2-10M)
Resolves to the party of the person inaugurated as New York governor after the 2026 election. · GOVPARTYNY-26
If New York stops prediction-market sports contracts in the state
+$2.5M a year
+0.4% of Adjusted EBITDA · range $0 to +$5.0M estimated
Who wins (chance the policy follows is estimated)
Kathy Hochul (D)
94%
to win
Kalshi94%
1,104,081 contracts
If they win: 45% chance it happens
treats prediction-market sports contracts as illegal gambling; state suits against Kalshi and Polymarket · make: alone · source
Bruce Blakeman (R)
6%
to win
Kalshi6%
3,975,086 contracts
If they win: 0% chance it happens
criticized Hochul for rejecting a revenue deal with Kalshi; no row on stopping them · none
Policy book NY-governor.md: Hochul make: alone 0.45; Blakeman has no row for this policy (0). The AG race (James 0.70, sue) prices the same channel; not added to avoid double counting.
chance 42%election swing 0.45below the bar
How this number is built
DraftKings New York sportsbook revenue ~$625M (estimated, structure.md) x ~1% of play won back from prediction markets (0-2%; CEO calls the effect 'de minimis') = ~$6M x ~40% flow-through after the 51% New York tax = ~$2.5M a year
Predictions spend (+$150M if a federal ban forces DraftKings Predictions to close) is derived by subtraction: management's ~$1B 'core' Adjusted EBITDA vs 2026 guidance of $700-900M. The ban would also end a strategic product; long-run value is not netted
Gambling-loss cap: no public estimate of the handle effect was found (Citizens' analyst calls it negative but unquantified). The 0.5-2% of gaming revenue range is the analyst's assumption, not a source
iGaming sizes (NY +$125M, OH +$100M, MA +$80M) all use one ratio: PA-like spend per adult x DraftKings' ~17% national iGaming share x ~20-25% EBITDA margin after tax. A new state's tax rate (NY bills have proposed 30%+) could halve these
Book row doubted: MA-governor.md gives Healey (who opposes iGaming, block: veto) p 0.07 while Minogue, with no row, gets 0. The candidate who blocks the policy ends up with the higher chance of it; the 0.07 swing points the wrong way
Book row doubted: NY-governor.md gives Hochul and Blakeman the same 0.05 (vague) on iGaming, so the race shows no swing although only Hochul controls the budget she has kept iGaming out of
Nebraska: the Kalshi ballot-measure market is thin (383 contracts on the regulation initiative); both 440 (constitutional authorization) and 441 (regulation) are needed. Size uses an LB 421 fiscal note and a sponsor-commissioned study (Eilers & Krejcik), not a fiscal note for 441 itself
New York prediction-market stop: DraftKings' CEO calls the cannibalization 'de minimis'; the impact is small and the federal preemption fight (CFTC v. New York) may decide it rather than the governor
Election risk MEDIUM would be LOW at the low end (+$40.0M) of the impact range for: Massachusetts legalizes online casino games. Read how the impact was built.
Policy risk HIGH would be MEDIUM at the low end (+$50.0M) of the impact range for: Congress bans sports contracts on CFTC-regulated prediction markets in 2026. Read how the impact was built.
Congress bans sports contracts on CFTC-regulated prediction markets in 2026: the impact is an estimate, not a reported number.
Congress changes or removes the 90% cap on gambling-loss deductions before 2027: the impact is an estimate, not a reported number.
Nebraska voters legalize online sports betting: thin market (3,166); one trader can move the price.
New York legalizes online casino games: the impact is an estimate, not a reported number.
Massachusetts legalizes online casino games: the impact is an estimate, not a reported number.