Kalshi Prediction Markets Draw Super Bowl Bets, Pressure DraftKings and Flutter (DRA: -60%, FLT: -80%)

Prediction markets are stealing a significant share of Super Bowl wagers, sending shares of DraftKings (DRA: -60% from 2019 high) and Flutter Entertainment PLC (FLT: longest 8-week decline in 23 years) into negative territory. Kalshi, the leading U.S. prediction market exchange, attracted 1.9 million downloads in January and is forecasting $630 million in Super Bowl trading, capturing about 80% of the year-over-year growth in event wagering. The CFTC has not stepped in to ban sports-related contracts, and Kalshi’s trading volume from sports-related events surpassed 90% of its total activity. Analysts project $1.78 billion in total handle for the Super Bowl, up 9% from 2024, but with prediction markets accounting for a growing portion of bets. While some gambling companies like BetMGM report strength in traditional sportsbooks, DraftKings and FanDuel face headwinds as Kalshi gains traction in states where traditional online gambling is not allowed. Regulatory battles over prediction markets loom, but CFTC Chair Michael Selig signaled continued federal oversight. Wall Street earnings and revenue estimates for Flutter and DraftKings have declined sharply in the past three months, reflecting broader weakness in the sector amid shifting wagering patterns and regulatory uncertainty.