Sports betting equities took a sharp hit Tuesday amid reports of record-breaking volume on prediction market operator Kalshi and its launch of same-game football parlays. However, analysts argue the sell-off may be exaggerated.
DraftKings (NASDAQ: DKNG) fell 11.37% on trading volume more than four times its daily average. Flutter Entertainment (NYSE: FLUT), parent company of FanDuel, declined 10.50% on triple the typical turnover, while Rush Street Interactive (NYSE: RSI) slid 8.39% on heavier-than-usual activity.
The declines came after reports that Kalshi posted weekend trading volume of roughly $540 million on Sept. 27–28, surpassing its previous record from Election Day 2024. Yet, Texas Capital analyst David Bain cautioned that the figure may be misleading.
“The $540 million was reported as ‘volume,’ which likely reflects handle,” Bain said. “It’s unclear if Kalshi is counting both sides of trades. If so, the true number would be closer to $270 million.”
Even at face value, Kalshi’s handle remains a fraction of the $17 billion Bain estimates regulated U.S. sportsbooks will generate in September alone.
Prediction Markets Seen as Inferior Product
Analysts also note that while football season is boosting activity on platforms such as Kalshi and Robinhood, prediction markets are not necessarily superior to regulated sportsbooks.
Through the first four weeks of the NFL season, Kalshi’s pricing on money lines and totals has generally lagged behind DraftKings and FanDuel. Bain added that despite the introduction of parlays, prediction markets still offer limited content and functionality compared to established sportsbooks.
“Prediction markets may appeal in states without legal sports betting, such as California or Texas,” Bain explained. “But in mature markets like New Jersey, Nevada, or Pennsylvania, their appeal is minimal.”
Flutter Retains Analyst Support
Despite Tuesday’s slump, analysts remain bullish on Flutter. Jefferies analyst James Wheatcroft reiterated a “buy” rating and a $380 price target, suggesting nearly 50% upside from current levels.
He highlighted FanDuel’s broad product depth and significant international exposure, which provide resilience against potential competition from prediction markets. Wheatcroft also noted that states with legal sports betting could move to limit prediction markets and that if Congress approves broader regulation of yes/no exchanges, Flutter’s established presence in Europe would give it a competitive edge.
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