Over the last week, at least three lawsuits were filed against DraftKings related to its so-called “sports event contracts” on its prediction market.
Two were filed in federal court in Massachusetts, where DraftKings is based.
– Chan v. DraftKings Inc. et al
– Gordon et al v. DraftKings Inc. et al
Another was filed in South Carolina, which doesn’t have legal sports betting.
– Hughes v. DraftKings Inc. et al
The lawsuits allege a slew of unlawful conduct, underpinned by the core allegation that prediction markets are a form of gambling, not trading, and have led to financial losses.
Why it Matters
DraftKings launched its prediction market, a stock-market-style form of sports betting, in late 2025.
The company said it wanted to compete against other players in the rapidly growing space, which is currently led by Kalshi. Polymarket is also a leading prediction market brand.
Other traditional online gambling firms, including FanDuel, have launched prediction market products, overseen by the Commodity Futures Trading Commission (CFTC).
Arguably as a result of its market position and because it holds no state license to conduct online gambling, Kalshi has been the main target of at least two dozen lawsuits. Recently, New York sued Kalshi in a case that could be worth more than $36 billion.
So far, traditional sports gambling operators like DraftKings haven’t faced the same legal blowback over prediction markets. DraftKings has been sued numerous times over the years related to its house-banked online sports betting and online casino products.
The three new cases suggest that traditional sportsbook companies entering prediction markets may now begin facing the same litigation wave that has surrounded Kalshi and, to a lesser extent, Polymarket.
