DraftKings Shares Drop Amid Rising Competition from Kalshi

DraftKings (DKNG) shares plunged 10.2% on Tuesday, driven by investor concerns over emerging competition from privately held betting platform Kalshi. The latter reported record trading volumes over the weekend, signaling a potential threat to established players in the sports betting market.

Kalshi, backed by prominent venture capital firms, initially focused on event-based wagering but has recently expanded into real-time sports betting. Its surge in activity—marking the highest trading volume since the 2024 U.S. presidential election—contrasts with DraftKings' recent deceleration in sportsbook handle growth, despite a 45% year-over-year revenue increase last quarter.

Waning consumer sentiment further exacerbated the sell-off, dragging down other publicly traded betting operators. The sector now faces heightened scrutiny as private competitors leverage agility and innovation to capture market share.