- DNKG declined 1.6%, while FLUT stock dropped 2.2% in Monday’s premarket session.
- The rise of Kalshi and Polymarket has pressured DraftKings and Flutter shares in recent months.
- Stocktwits sentiment for DKNG and FLUT was ‘neutral.’
Shares of DraftKings and Flutter Entertainment fell in the early premarket on Monday after the Wall Street Journal reported that prediction market platforms Kalshi and Polymarket, seen as the emerging challenger in the sports betting industry, were in talks to raise fresh funding.
DraftKings shares declined 1.6%, while Flutter shares dropped 2.2%. U.S. stocks were broadly lower Monday morning as investors assessed the ongoing U.S. offensive in Iran and its potential impact on oil prices and the global economy.
Kalshi and Polymarket are both in discussions with potential investors about fundraising rounds that would value them at close to $20 billion, the Journal reported, citing its sources.
Kalshi was valued a $11 billion when it raised $1 billion in December from investors including Paradigm and Sequoia Capital. Polymarket was last valued at $9 billion in October after New York Stock Exchange owner Intercontinental Exchange agreed to invest up to $2 billion.
Prediction Market Challenge
The rise of these two platforms has pressured DraftKings and Flutter, which operates FanDuel, in recent months, even as companies and investors remain divided over how much prediction market wagering could affect demand for iGaming.
Separate regulatory approvals for both services, as well as growing scrutiny of Kalshi and Polymarket over controversial wagers, including bets tied to the fate of Iran’s Supreme Leader Ali Khamenei, have further complicated the equation.
DraftKings and Flutter have responded by launching their own prediction market offerings in recent months. Still, year to date, DNKG stock is down 27%, and FLUT stock is down 47%, with both tickers having a ‘neutral’ Stocktwits sentiment as of the last reading.
Last week, DraftKings forecast annual revenue below analysts’ expectations, sending its stock tumbling and reviving fears that new prediction market platforms are eating into its core iGaming and sports betting businesses.
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