Stocks to watch after the NBA’s betting scandal

The sports industry is in a state of shock following the arrest of more than 30 people involved with the National Basketball Association (NBA). 

The investigation, described as “mind-boggling” by the FBI Director Kash Patel, has spanned 11 states and involves millions of dollars allegedly made through illegal betting and game rigging during the 2023–2024 season.

According to the prosecutors, the scheme involved insider information and organized crime activity, damaging the reputation of the league on multiple fronts.

Given the scope of the problem, the question for investors with exposure to the sports industry is simple: What stocks to watch after the NBA’s betting scandal?

Warner Bros (WBD)

One of the NBA’s primary broadcasting partners, Warner Bros (NASDAQ: WBD) appears completely unshaken by the federal probe. On the contrary, it has been posting nothing but gains this year, its stock having nearly doubled since January and trading at $21.25 at the time of writing, up another 3.5% on the daily chart.

However, the company’s future trajectory now lies in a balance, as multiple candidates are reportedly looking to buy a portion or all of the firm. For instance, Warner Bros has already rejected three Paramount Skydance takeover offers, the last of which came in at just under $24 per share.

The management told CNBC on Tuesday, October 21, that it would continue reviewing all coming bids, while at the same time moving ahead with the current plans to split into two separate entities, namely a streaming and studios business platform and a global networks business.

This approach, said CEO David Zaslav, will allow the media giant “to identify the best path forward” and “unlock the full value of our assets.” Whatever the future might bring, WBD is thus definitely worth keeping an eye on. 

Madison Square Garden Sports (MSGS)

Madison Square Garden Sports (NYSE: MSGS) is a leading sports holding company managing the New York Knicks. While not as strong as Warner Bros, MSGS has also been on an upward trend, the stock climbing nearly 18% over the past six months and trading at $226.16 at press time, up 0.29% on the day and 0.24% in pre-market.

MSGS is a particularly interesting case as its Q3 earnings report is fast approaching, scheduled for November 7. While the Knicks don’t appear to be involved in the betting controversy directly, a perceived decline in confidence toward the league at large could theoretically pressure the stock, as could any new, potentially detrimental discoveries on the investigators’ part.

However, it is also worth noting that the team’s performance this season has not really affected the manager’s stock that much. Namely, the Knicks saw their first Eastern Conference Finals appearance in 25 years, but even with the 2026 title now in play, Madison Square Garden Sports shares have only climbed 3.4% over the past year.

What’s more, the operating margins remain slim. The company reported a combined $22.6 million loss at the end of the previous fiscal year, despite playoff revenue. Also, the two teams are worth around $13.5 billion in total, while MSGS trades at only $6.6 billion in enterprise value.

That is, MSGS offers exposure to the NBA at a deep discount, and the share prices could go up if the gap between public and private valuations manages to close, especially if the dreams of a new title are realized, but there are a number of factors at play now, making it difficult to predict how the situation could develop. Nonetheless, the stock is worth watching in the weeks to come.

DraftKings (DKNG)

DraftKings (NASDAQ: DKNG), a popular Boston-based betting company covering the NBA and other major American sports leagues, has been struggling in recent weeks, its stock plummeting nearly 20% on the monthly chart and trading at $34.70 at publication time.

With the integrity of sports betting now severely impacted, DraftKings finds itself in an even more precarious position, its shares being at risk of further losses. Nonetheless, some recent moves are drawing renewed investor attention, most notably the company’s first major foray into prediction markets through a strategic partnership with Polymarket. 

More precisely, DraftKings plans to launch its new DraftKings Predictions mobile app in the coming months, covering markets across finance, culture, and entertainment. Polymarket itself is currently in early talks to raise capital at a $12–15 billion valuation, a substantial increase from the June 2025 valuation of $1 billion. Expectedly, existing backers and potential new investors alike are paying close attention to the betting platform.

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