Sportsbook stocks sink to multiyear lows as prediction markets surge

DraftKings closed at $19 a share on Sept. 30, its lowest price since April 2023. Read more: Sportsbook stocks sink to multiyear low as prediction markets surge. 

Flutter Entertainment, FanDuel's parent company, closed the same day at $74.54, its lowest level since the stock began trading on the New York Stock Exchange in January 2024. Both stocks have lost more than 70% of their value from last year's highs. DraftKings has fallen from $38.06 a year ago to less than half that.

Together, the two companies that control most of the U.S. sports betting market are now worth roughly $30 billion, a fraction of their 2025 valuations. The slide has tracked a surge in prediction markets, the exchange-style platforms where users trade contracts on sports outcomes instead of placing traditional bets.

Prediction markets post a record month

Combined sports and combo contract volume across the major prediction exchanges hit $68.18 billion over the 30 days ending Sept. 29, up 72% from $39.74 billion the month before, according to data reported by Bitcoin.com News.

Combo contracts, which bundle multiple game outcomes into a single trade, more than doubled to $41.7 billion and accounted for most of the increase. Kalshi remains the largest player, with its own volume growing 65% to $50 billion. But its share of the combined market slipped from 76.1% to 73.4% as smaller rivals grew even faster. Polymarket's verified U.S. volume jumped 127% to $8.3 billion, lifting its share to 12.2%.

Related: A beginner's guide to profitable sports betting

DraftKings' own prediction exchange, DKeX, grew from $88.7 million to $1.9 billion. Novig grew 136%, pushing its share to 2%. A separate estimate from investment bank Needham, cited by 24/7 Wall St., put Kalshi's share of NFL prediction-market volume at 76% in the season's opening week, or 67% once professional trading volume is stripped out, with DKeX at 3%. DraftKings shares fell 2% to $20.77 and Flutter fell 2% to $80.56 the day that estimate circulated, Sept. 25. DraftKings finished that session down 38% for the year.

Investor money is following the volume. Kalshi was valued at $11 billion in a funding round late last year and $22 billion in a round this spring. The exchange is reportedly now seeking financing at a valuation near $40 billion, according to Reuters.

Robins defends DraftKings' position

DraftKings CEO Jason Robins addressed the competition directly during a Sept. 22 webinar with Wells Fargo analyst Trey Bowers, according to Covers.com.

Robins said prediction-market trading volume on DraftKings' own platform has run nearly 2.5 times July levels, with more than 1 million customers now using the company's prediction product. He said NFL combination trades made up nearly 30% of the company's NFL activity on a recent Sunday.

He also pointed to how much of the stock pressure traces back to prediction markets' uncertain legal footing rather than to DraftKings' own business.

"I would say I'd rather see them stay, but I would also guess that if prediction markets got shut down by the Supreme Court tomorrow, our share price would pop," Robins said. "I really believe that we are well set up regardless of the outcome."

Flutter cuts its guidance

Flutter's slide traces to a separate cause. The company cut its 2026 revenue guidance by $395 million and its adjusted EBITDA (a measure of underlying profitability) guidance by $210 million, citing new spending to shore up FanDuel's sportsbook business amid softer customer trends and rising churn.

Flutter's adjusted EBITDA fell 45% year over year in the second quarter.

DraftKings had already missed its own guidance earlier in the year. Its 2026 revenue guidance of $6.5 billion to $6.9 billion, issued in February, came in about 8% below Wall Street's $7.3 billion consensus estimate and triggered an 18% single-session stock drop at the time.

Kalshi's reported fundraising target alone would value the exchange above DraftKings and Flutter combined.

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