Gambling Stocks Decline as Crypto Prediction Markets Gain Momentum
Traditional gambling stocks faced significant losses last week as prediction market platforms Polymarket and Kalshi continued to attract users. DraftKings, a leader in the sector, dropped 7.6% to a one-month low of $32.83, while Flutter Entertainment hit a six-month low after a 5.6% decline. The S&P index for the industry fell 2.5% on average.
Prediction markets are capitalizing on growing interest in financial and sports-related wagering, with Polymarket and Kalshi reporting peak activity. The upcoming NFL playoff season could further accelerate this trend. Meanwhile, traditional sportsbooks are seeing slower revenues compared to previous years.
DraftKings' recent announcement of its own prediction market platform failed to stem the decline. The company, along with Flutter, has launched prediction products in states where sports gambling remains illegal, but these initiatives have yet to gain meaningful traction.
