DraftKings (NASDAQ: DKNG) is enduring a sharp slump, with shares down nearly 19% over the past week and almost 27% in the past month. If losses extend today, the stock will notch its eighth straight decline. But Cathie Wood isn’t shying away from the slide.
ARK Investment Management, Wood’s firm and a longtime DraftKings backer, scooped up 511,049 shares of the gaming company on Wednesday. The purchase was spread across three of its actively managed ETFs.
The bulk of the buy — 350,315 shares — went to the flagship ARK Innovation ETF (NYSEARCA: ARKK), where DraftKings is now the 37th-largest holding in the $7.17 billion fund. ARKK, ARK’s largest ETF by assets under management, is up nearly 56% year-to-date.
While DraftKings is ARKK’s only pure-play gaming stock, the ETF also counts Robinhood Markets (NASDAQ: HOOD) among its top 10 holdings. Robinhood’s growing presence in prediction markets, particularly through its partnership with Kalshi, has become a competitive headwind for DraftKings and other sportsbook operators.
Prediction Markets vs. Sportsbooks
Analysts have linked recent weakness in sports betting stocks to surging prediction market activity. Kalshi, for example, recently began offering football parlays, and Robinhood disclosed it has processed over four billion event contracts — more than half in the third quarter alone.
Still, some on Wall Street argue the threat may be overstated. Prediction market volumes could be inflated by double-counting, making comparisons with traditional sportsbook handle misleading. Others suggest the real drag on DraftKings and Flutter Entertainment (NYSE: FLUT), FanDuel’s parent company, has been September’s bettor-friendly NFL results. That month typically drives about half of operators’ third-quarter handle, prompting some analysts to trim 2025–2026 EBITDA forecasts for both companies.
Other ARK Buys
Beyond ARKK, ARK Invest added 103,872 DraftKings shares to the ARK Next Generation Internet ETF (NYSEARCA: ARKW), where it now ranks as the 31st-largest holding. The ARK Fintech Innovation ETF (NYSEARCA: ARKF) also picked up 56,862 shares, making DraftKings its 20th-biggest position.
Outside of ARK, Vanguard and BlackRock remain the largest institutional holders of DraftKings, collectively owning more than 14% of the stock as of the second quarter.
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