DraftKings Inc., Flutter Entertainment PLC and other stocks linked to the sports gambling industry are tumbling on Friday after new data suggested that they may be losing ground to competing products from prediction market startups.
Platforms like Kalshi and Polymarket, which have recently introduced financial contracts tied to the outcome of sports games, reported surging activity last week during the beginning of the NFL playoff season. Meanwhile, during what is typically a boom time for sportsbooks, New York state data showed that revenues from online sports wagering plunged from a year earlier.
DraftKings shares dropped as much as 8.3% in New York trading, the worst intraday plunge since late October. Shares of Flutter, which runs the gambling app FanDuel, were down as much as 5.5%, falling to the lowest intraday level since late November. The broader gambling space also took a dive, with an S&P gauge of the industry’s shares shedding as much as 2.5%.
Online sportsbooks have been under pressure for months since prediction markets rose to prominence with their new sports contracts. The startups have used their status as federally regulated exchanges to offer sports wagers that circumvent the state laws that have governed online gambling.
