DraftKings stock has fallen roughly 50% over the past year, while FanDuel parent Flutter Entertainment’s stock has fallen close to 69%. Yet both companies insist the rise of prediction markets is having little impact on their traditional sportsbooks.
The companies each missed earnings expectations this week, although DraftKings maintained its full-year guidance while Flutter cut its full-year profit guidance by 22%. Both DraftKings and Flutter are trading up after reporting second-quarter earnings—as of mid-afternoon Friday, the former was up around 6% and the latter was up a little over 2%. DraftKings says it is seeing “no discernible impact” from prediction markets on its traditional sportsbook business, and Flutter says FanDuel has seen a “low single-digit” impact.
But the broader stock slide is impossible to ignore. The rise of platforms like Kalshi and Polymarket has created a new set of competitors for traditional sportsbooks, with an “arms race” expected as the NFL season nears. All of this raises the question of why these companies are facing such stock pressure despite their claims that there is very little cannibalization.
“That’s a great question for someone on Wall Street to answer,” DraftKings CEO Jason Robins tells Front Office Sports. “This is a little bit of a period where people are concerned because there’s something that’s new, and it’s an unknown.”
