DraftKings shares rose as much as 10% intraday on August 28 after the Ninth Circuit Court of Appeals ruled that Nevada can enforce its gaming laws against Kalshi’s sports-related event contracts. The court classified the contracts as gambling rather than federally regulated swaps overseen by the CFTC (U.S. derivatives regulator). DraftKings closed up 4.29% at below $25, although the stock remained more than 50% below its early 2025 peaks. The ruling could reduce the competitive advantage of prediction markets, which have offered sports-related contracts nationwide without the state-by-state licensing and tax burdens faced by sportsbooks such as DraftKings and FanDuel. DraftKings is also building its own predictions business: after acquiring Railbird Technologies in October 2025, it launched the DKeX exchange in June 2026, and its Predictions platform now operates in 18 states. For the week ending June 21, 2026, the company reported $11.3 billion in total trading volume across its predictions segment and annualized consumer volume of $3.4 billion. Michael Burry bought DraftKings shares in July 2026, reportedly betting that regulatory action would reduce prediction markets’ competitive pressure. The legal dispute remains active after a September 2 petition from New Jersey sought U.S. Supreme Court guidance on the boundary between federal authority and state gambling regulation. A continued shift toward state oversight would pose a major challenge for Kalshi, while DraftKings’ existing licenses and compliance infrastructure could become strategic advantages.