UFC Deepens Ties With Prediction Markets While Dana White Pushes Trump to Fix Sportsbook Tax Rules
UFC continues to sign deals with prediction market platforms. On the same day Kalshi announced a sponsorship agreement with Nate Diaz, Dana White sent a letter to President Donald Trump urging him to roll back tax changes that hurt traditional sports betting.
The moves highlight a clear tension. The UFC is building commercial relationships with Kalshi and Polymarket while its president warns that current tax policy threatens the legal betting ecosystem the organization helped create. After eighteen years on bookmaker trading floors this pattern is familiar. Operators chase revenue wherever it appears. Policy decisions then reshape where that revenue actually flows.
Kalshi Deal Follows Polymarket Partnership
Kalshi said the deal with Diaz includes sponsorship of shorts, billboards, and a co-branded social campaign. Diaz is expected to appear with Kalshi branding in his return to the octagon against Mike Perry this weekend.
The Kalshi-Diaz deal follows the UFC’s announcement in November last year that rival platform Polymarket was its “Official and Exclusive Prediction Market Partner.”
Prediction markets are increasingly signing partnerships with sports leagues, teams, and athletes. In addition to the UFC, companies have partnered with the MLS, NHL, FIFA, MLB, and most recently LIV Golf.
Nate Diaz said: “Kalshi came in and showed the love and support for me for this fight and the overall brand. It’s good to be in business with them.”
Valeria Vouterakou, counsel at Kalshi, said: “Nate Diaz is one of the most authentic, fearless competitors in sports. He’s exactly who we want representing the brand.”
The UFC is treating prediction markets as legitimate commercial partners. That decision carries operational weight inside any fighting organization that relies on broadcast value and sponsorship dollars.
Dana White Calls Betting Essential to UFC Survival
Dana White said in a letter to Trump that betting is essential to the organization’s survival. He is calling on the President to reverse the gambling tax change introduced as part of Trump’s One Big Beautiful Bill Act last year.
Under the new rules, bettors are only able to deduct 90% of losses from winnings before paying tax on the remainder.
White added that the change “makes it irrational to bet in the United States because you could end up owing taxes even when you lose or having a tax bill that exceeds your winnings for the year.”
He wrote: “The UFC supports a healthy, legal sports betting market to drive fan engagement, broadcast value, and sponsorships. When legal betting is discouraged, it hurts the ecosystem we’ve spent years building in partnership with state regulators and licensed operators. It also undercuts the transparency and integrity protections that legal betting provides for professional sports.”
White also argued the new regulations threaten Trump’s policy of “no tax on tips” as “gamblers are likely to be less generous if they even gamble at all.”
Bookmaker trading floors have seen this before. Change the tax treatment of losses and you change customer behavior. The money follows the path of least friction.
Recent Scandals and Handle Decline Add Pressure
The UFC has seen a decline in betting handle recently. Thomas Gable, Borgata Race & Sportsbook Director, said: “We’ve seen a recent decrease in the handle and betting action for the UFC. It’s likely a combination of factors, of which the integrity issues are one.”
Concerns over suspicious betting activity surfaced again in the Sean Brady vs. Joaquin Buckley fight at UFC 328 on Saturday. The pre-fight lines moved dramatically to make Buckley the favorite, despite him having been the underdog in the lead-up to the contest.
Unlike recent fights involving Isaac Dulgarian and Michael Johnson, the Brady fight went off as planned. The money on Buckley proved to be a misnomer as he was decisively beaten.
These incidents sit alongside the tax change. Together they create a difficult operating environment for sportsbooks that hold licenses, pay taxes, and work with regulators. Prediction market partners face none of those frictions in the current structure.
Tax Treatment Creates Uneven Playing Field
The tax increase does not apply to profits gained from prediction markets, as they are not officially categorized as gambling.
Critics argue that prediction markets increase the risk of match-fixing and insider trading. The UFC appears unconcerned as the organization and fighters such as Diaz sign deals with these operators.
White fears the tax change will discourage bettors from wagering on the UFC or send them to unregulated platforms. It could also encourage gamblers to use prediction markets.
Currently, if you made $5,000 on a prediction market and lost $5,000, you would owe $0 in taxes because you can net them out as capital losses. If you did the same at a sportsbook, you would owe taxes on $500 (the 10% of losses you are no longer allowed to deduct).
A recent survey suggests that gamblers still prefer betting at sportsbooks, with DraftKings’ overall wagering experience making it the most popular platform. That preference could shift as Kalshi ramps up its sports advertising through deals such as its sponsorship of Diaz.
The risk here is real. Legal sportsbooks built compliance systems, reporting requirements, and integrity partnerships after years of regulatory pressure. Prediction markets operate under a lighter framework. If capital migrates because of tax treatment rather than product quality, the integrity infrastructure that White praises could weaken even as commercial deals with prediction platforms multiply.
That tension will not resolve itself. Operators on both sides will adjust their offerings. Bettors will follow the math.
The Bottom Line
The UFC is voting with its sponsorship dollars while Dana White warns policymakers that current tax rules hurt the legal betting market the organization depends on. The 90% loss deduction limit creates a measurable disadvantage for sportsbooks relative to prediction platforms that can net gains and losses as capital items. After eighteen years watching how policy changes move handle and liability, one pattern holds. Bettors respond to incentives. When the after-tax math favors one channel over another, volume follows. The UFC’s partnerships with Polymarket and Kalshi accelerate that shift even as White asks Trump to protect the traditional ecosystem. World Cup 2026 will test which side of the market reads customer behavior more accurately. The data will be public. The receipts will speak for themselves.
