DraftKings moves to counter prediction markets threat
DraftKings is holding on to its gains from after the bell yesterday, trading 6% higher in the premarket, following news that it’s buying Railbird in an effort to address the competitive threat from prediction markets that has weighed on its share price — and that of FanDuel parent Flutter Entertainment — for weeks.
The deal is the latest example of the increasing linkages and overlap between worlds of financial markets, gambling, and prediction markets.
Earlier this month, Intercontinental Exchange — the parent company of the New York Stock Exchange and the ICE futures markets, among others — announced it would invest up to $2 billion in prediction markets company Polymarket.
And Robinhood shares have recently gotten a lift from its ongoing partnership with prediction markets platform Kalshi, which has seen growing uptake of its events contracts that allow buyers to take positions on football games.
(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)
By and large, investor excitement over prediction markets — which has picked up since the start of the football season — has seemed to come at the expense of Flutter and DraftKings, the two companies that dominate US sports betting.
Over the last three months through the end of regular trading on Wednesday, DraftKings and Flutter were down 23% and 18%, respectively, while the S&P 500 is up about 7%.
The deal is the latest example of the increasing linkages and overlap between worlds of financial markets, gambling, and prediction markets.
Earlier this month, Intercontinental Exchange — the parent company of the New York Stock Exchange and the ICE futures markets, among others — announced it would invest up to $2 billion in prediction markets company Polymarket.
And Robinhood shares have recently gotten a lift from its ongoing partnership with prediction markets platform Kalshi, which has seen growing uptake of its events contracts that allow buyers to take positions on football games.
(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)
By and large, investor excitement over prediction markets — which has picked up since the start of the football season — has seemed to come at the expense of Flutter and DraftKings, the two companies that dominate US sports betting.
Over the last three months through the end of regular trading on Wednesday, DraftKings and Flutter were down 23% and 18%, respectively, while the S&P 500 is up about 7%.
