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- Shares of DraftKings dropped to their lowest point in over three years, hitting $18.55 on Thursday, as the sportsbook operator faces mounting investor concerns over a disappointing second-quarter earnings report, heavy promotional spending, and rising competition from prediction markets.
- The selloff extended across the broader online betting sector, dragging down FanDuel parent company Flutter Entertainment to near multi-year lows as the market continues to scrutinize the long-term profitability of aggressive customer acquisition strategies and ongoing legal pressures surrounding sportsbook promotions.
DraftKings shares fell to their lowest level in more than three years on Thursday, touching about $18.55 before closing at $19.35, as pressure spread across online betting stocks including Flutter Entertainment, the parent company of FanDuel.
The drop extends a sharp slide for DraftKings, whose shares have lost roughly half their value over the past year. For gambling investors, the move highlights how weak earnings, heavier promotional spending, and rising competition from prediction-market-style products are weighing on sentiment across the sector.
Weak quarterly results added to pressure on DraftKings
DraftKings said its second-quarter 2026 revenue was about $1.44 billion, down from about $1.51 billion a year earlier. The company also reported a net loss attributable to common stockholders of $67.6 million, or $0.14 per share, compared with net income of $157.9 million, or $0.32 per basic share, in the same quarter last year.
According to the company, revenue fell mainly because of customer-friendly sports outcomes and higher promotional reinvestment tied to customer acquisition for its Sportsbook and Predictions offerings.
That came despite continued handle growth. DraftKings said sports consumer volume rose 15% year over year to $13.1 billion.
Management kept its full-year 2026 guidance unchanged, including projected revenue of $6.5 billion to $6.9 billion and adjusted EBITDA of $700 million to $900 million. The company also said its core sportsbook business remains on track for roughly $1 billion in adjusted EBITDA this year.
FanDuel parent Flutter also traded near multi-year lows
The selloff was not limited to DraftKings. Flutter Entertainment plc also traded near multi-year lows during the same period, with a recent session trough around $74.35. On Thursday, Flutter fell to about $74.54 before closing at $76.47.
That broader weakness suggests investors are not treating DraftKings’ decline as only a company-specific issue. The source report pointed to sector-wide pressure on online betting names, with investors increasingly focused on competition from event-contract and prediction market platforms as DraftKings expands its Predictions business.
DraftKings executives have said Predictions is growing faster than expected and has had limited impact on the core sportsbook so far.
Scrutiny over promotions adds another layer of risk
Beyond earnings pressure, DraftKings has also faced public scrutiny over its promotional practices. The company was referenced in a September New York Times investigation, and a proposed class-action lawsuit was filed this week in Massachusetts federal court.
The report said DraftKings has disputed claims that it used AI targeting based on player losses.
What to watch next is whether upcoming earnings updates show improved revenue trends and whether investor concerns around promotions and prediction-market competition ease. For now, Thursday’s trading reinforced that pressure on major U.S. betting stocks extends beyond a single operator.
Source: As reported by Sergey Demidov.
