Several sports betting companies saw their stock take a downward turn Tuesday morning following a major announcement from a prediction market platform.
Key Takeaways
- DraftKings, FanDuel’s parent company, and other operators felt the Polymarket news Tuesday.
- Gaming company stocks have been falling recently.
- Kalshi and Robinhood have reported growth in football market volume.
DraftKings Sportsbook dropped over 6% early in the day and was still down around 5% by the afternoon. Flutter, the global gaming company that owns FanDuel, saw its stock plummet 5% by Tuesday afternoon.
Rough start to the day for gaming stocks on a bad day for markets overall. FanDuel parent $FLUT and $DKNG lag following news of a $2 billion investment in prediction market Polymarket pic.twitter.com/Wgn2iGyu5C
— Ryan Butler (@ButlerBets) October 7, 2025
This comes days after last week’s 18% drop for DraftKings and 8% for Flutter. Those are the two biggest sports betting and iGaming operators in the U.S., with FanDuel being the top market-share operator.
Rush Street Interactive, which operates BetRivers and Caesars Entertainment, also experienced similar stock drops Tuesday. Analysts say investors are selling gaming shares as the competition between sportsbooks and prediction market platforms causes concern in the industry.
Earlier Tuesday, Polymarket, the largest global prediction market, received a $2-billion investment from Intercontinental Exchange, the New York Stock Exchange owner. Polymarket’s valuation skyrocketed to over $8 billion ahead of its U.S. relaunch at some point this year.
Record pace
The news sent a few shockwaves through Wall Street that were felt by sportsbooks, but they could also be feeling it on weekends. Kalshi, a popular prediction platform, and partner Robinhood, a trading exchange, have experienced rapid growth in NFL and college football markets over the last month.
Kalshi set weekly volume records each week in September, according to Bloomberg. The last Saturday of the month generated $260 million, beating out the previous record of $245 million set during 2024’s Election Day.
Robinhood told Bloomberg that more than 2 billion of its 4 billion contracts traded this year have come during the third quarter, when sportsbooks generate a large amount of their yearly handle and revenue.
“These companies need to come out with a strategy for investors - whether it’s launching prediction markets or stepping up marketing,” Citizens equity research analyst Jordan Bender told Bloomberg. “Until that happens, the prediction markets present a risk.”
Not so fast?
Just last month, Citizens said Kalshi didn’t pose a competitive risk to FanDuel and DraftKings because of pricing issues. Bloomberg reported that analysts have been telling investors to buy the dips in gaming stocks.
That could begin to change. Until recently, prediction markets didn’t offer popular parlays, which are big draws at online sportsbooks. However, Kalshi has slowly and quietly been offering more contracts over the last couple of weeks that can be added together, similar to the multi-leg bets that are a lucrative source of revenue for sportsbooks.
Both Kalshi and Robinhood are available in all 50 U.S. states, which has created issues in jurisdictions with legal sports betting.
