The UFC is increasingly turning to prediction markets for sponsorship deals, as Dana White says President Donald Trump is letting down traditional gambling.
On the same day that Kalshi announced a deal with Nate Diaz, White sent a letter to Trump urging the President to roll back tax changes for gamblers.
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.
Kalshi Deal Follows UFC-Polymarket Collaboration
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.”
“Kalshi came in and showed the love and support for me for this fight and the overall brand,” said Diaz. “It’s good to be in business with them.”
“Nate Diaz is one of the most authentic, fearless competitors in sports,” said Valeria Vouterakou, counsel at Kalshi. “He’s exactly who we want representing the brand.”
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.
UFC Relies on Betting, Says White
Despite some high-profile betting scandals, White said in a letter to Trump that betting is essential to the organization’s survival.
White 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.
Several lawmakers have proposed reversing the rule, but Trump has been reluctant to support rolling it back. White said that 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.”
He 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.”
“The UFC supports a healthy, legal sports betting market to drive fan engagement, broadcast value, and sponsorships,” White wrote in the letter highlighted by prediction markets analyst Dustin Gouker.
“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 stated.
Betting Scandals & Rule Change Impact UFC
Whether due to the tax change or recent betting scandals, the UFC has seen a decline in betting handle recently.
“We’ve seen a recent decrease in the handle and betting action for the UFC,” said Borgata Race & Sportsbook Director Thomas Gable. “It’s likely a combination of factors, of which the integrity issues are one.“
Concerns over suspicious betting activity again surfaced 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, however, the Brady fight went off as planned. The money on Buckley proved to be a misnomer as he was decisively beaten.
Tax Change Could Strengthen Prediction Markets
Critics of prediction markets argue that they increase the risk of match-fixing and insider trading, but the UFC appears unconcerned, as the organization and fighters such as Diaz sign deals with operators.
The tax increase does not apply to profits gained from prediction markets, as they are not officially categorized as gambling.
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 could change as Kalshi ramps up its sports advertising through deals such as its sponsorship of Diaz, however.
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