John Arnold commits $2.6 million to study online sports betting risk

Billionaire philanthropist John Arnold says online sports betting has changed immeasurably since it became legal in the U.S. in 2018, thanks to the rise of online prediction market platforms Kalshi and Polymarket and mobile apps like DraftKings and FanDuel. To better understand the potential risks, he’s awarding $2.6 million to researchers studying the evolving world of gambling on sports.

The grants, which have not been previously reported, will go to researchers at universities and think tanks to look at the effect of gambling on financial well-being, household formation, mental health and consumer behavior.

Arnold, who co-founded Arnold Ventures with his wife, Laura, told CNBC he wants lawmakers and regulators to wake up to the new reality of the booming sports betting market.

“Being able to bet over the phone has dramatically increased access and lowered friction,” Arnold told CNBC. “It has changed what the product is. You can bet on every pitch. You can bet with a speed that was never possible when you had to place a call to put a bet down.”

Arnold, a former hedge fund owner and Enron energy trader whose philanthropy has worked on criminal justice reform and improving higher education, has turned his attention more recently to the potential pitfalls of prediction markets and sports gambling apps, meeting with lawmakers and pushing for stronger guardrails.

Schools including Princeton University, the University of Pennsylvania and the University of Wisconsin will receive Arnold’s grants for research over the next three years, Arnold Ventures said in a press release.

A 2018 Supreme Court decision paved the way for legalized sports betting in the U.S., with participation growing in the years since. An April survey by the Research Institute of Siena University found that 27% of Americans have an active online sports betting account, up from 19% in 2024.

The sports betting industry hit a record $16.96 billion in revenue in 2025, the American Gaming Association announced earlier this year. And trading volume on the top two prediction markets — Kalshi and Polymarket — has grown from less than $5 billion in September to roughly $24 billion in April, according to an analysis by Pew Research Center. 

Sports are the most popular type of event contract by volume on prediction markets, which operate distinctly and are subject to a different regulatory authority than traditional gambling sites. As of February, about 87% of bets made on Kalshi in the last year were on sports, according to the Congressional Research Service.

Thirty-nine states, plus the District of Columbia, have legalized sports betting since 2018.

“A lot of states jumped into legalizing sports betting in 2018. And I think that…