The post DraftKings, Flutter Shares Drop on Bank of America Downgrade as Prediction Markets Bite appeared first on Vegas Slots Online News.
Shares fall again
This year’s rollercoaster ride for shareholders of DraftKings and FanDuel parent Flutter has taken another downward turn after the Bank of America (BofA) downgraded the pair from Buy to Neutral, citing multiple threats, including prediction markets.
lowest point in over two years
According to Bloomberg, trading in DraftKings on Tuesday closed down 6.4% after hitting its lowest point in over two years earlier in the day.
Shares in Flutter’s primary London listing also suffered on the downgrade, closing 3.9% down on the same day.
According to reports, BofA’s Securities Stock Analyst Shaun Kelley expressed concern over the “structural hold,” or implied win margin applicable to a given range of bets, stating that the model “doesn’t look so structural anymore” because of recent unfavorable sports outcomes.
Bettors winning, rivals thriving
The structure’s wobbliness in BofA analyst’s eyes comes from bettors winning more often, which impacts long-term earnings stability for both DraftKings and FanDuel’s parent. BofA said this trend affects margins “by as much as 200 basis points (2%).”
The other major threat to both firms is prediction markets.
downgraded “solely on prediction markets”
Kelley stated that even without other headwinds, the stock would be downgraded “solely on prediction markets” with the likes of Kalshi and Polymarket devouring DraftKings and FanDuel’s once seemingly unassailable market share.
New York-based Kalshi has already hurt both DraftKings and FanDuel after wiping out $7bn in market share in late September when it debuted its same-game parlay product.
Then came taxes
The final nail in the downgrade coffin came in the form of taxes. Both DraftKings and FanDuel face state gaming tax increases in 2026. Additionally, BofA’s concerns over the expected UK gambling tax hike contributed to its downgrade of Flutter.
As such, BofA slashed price targets by 27% and 23% to $35 and $250 for DraftKings and FanDuel, respectively.
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