Stocks for DraftKings and Flutter Entertainment fell in 2026 as prediction markets saw record volumes. Last week, Kalshi reported $720 million in NFL-related bets, including over $100 million on a single game. Sports bets account for about 90% of Kalshi's trading volumes.
New York state data shows online sports wagering revenue plunged during the NFL playoff season, a period typically strong for betting. Platforms like Kalshi and Polymarket operate as federally regulated exchanges, circumventing state gambling laws. This allows them to reach users nationwide, even where online gambling is restricted.
Equity research analyst Jordan Bender said prediction markets are impacting sports betting companies, especially during major events like NFL playoffs. As volumes rise, these markets are stealing market share.
During the recent NFL playoffs, Kalshi recorded its five highest-volume games of the season. State regulators have labeled some products illegal and urged shutdowns, but the platforms continue operating.
Sports betting forms core revenue for DraftKings and Flutter. For DraftKings, sports betting accounted for approximately 52% of its revenue in the third quarter, totaling $596 million out of $1.14 billion. Flutter's U.S. segment, driven by FanDuel's sportsbook, generated $1.37 billion in Q3, representing about 36% of its total $3.8 billion revenue.
New entrants are expanding the space. Platforms like Pariflow, which uses AI for predictions, and Fanatics Markets are gaining attention. Others include Underdog, ForecastEx, and Robinhood's MIAX exchange. Coinbase is also expanding into prediction markets. These newcomers often partner with established players, such as Kalshi distributing contracts via Robinhood or Flutter entering through a partnership with CME Group.
Six apps currently compete, with three more slated for early 2026 launches. Sports betting and fantasy companies are developing in-house options, accelerating competition.
DraftKings and Flutter have begun responding by launching their own prediction market offerings last month in states where sports gambling remains illegal. They are leveraging brand recognition in betting. However, traction is unclear, and building scale may take time due to regulatory hurdles and competition from startups.