A big announcement from a prediction market platform caused the stock of several sports betting companies to plummet Tuesday morning.
Early in the day, DraftKings Sportsbook saw a decline of more than 6%, and by the afternoon, it had fallen by about 5%. By Tuesday afternoon, the stock of Flutter, the international gaming company that owns FanDuel, had fallen 5%.
This occurs a few days after DraftKings and Flutter saw drops of 18% and 8%, respectively, last week. FanDuel holds the most market share among the two largest sports betting and iGaming companies in the United States.
Tuesday’s stock declines were comparable for Rush Street Interactive, the company that runs Caesars Entertainment and BetRivers. According to analysts, investors are liquidating their gaming shares as the industry becomes alarmed by the rivalry between sportsbooks and prediction market platforms.
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The owner of the New York Stock Exchange, Intercontinental Exchange, invested $2 billion in Polymarket, the biggest prediction market in the world, earlier Tuesday. Before Polymarket’s U.S. relaunch later this year, its valuation soared to over $8 billion.
Record speed
Sportsbooks may be feeling the effects of the announcement on weekends, but it sent a few shockwaves through Wall Street. Throughout the past month, the NFL and college football markets have seen tremendous growth for Kalshi, a well-known prediction software, and its trading exchange partner Robinhood.
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