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Read Full BioDraftKings and Flutter suffered declines in their stock prices amid Kalshi’s announcement of new funding and global expansion plans.
DraftKings fell 0.75% and Flutter (FanDuel’s parent company) fell 3% on Friday on the New York Stock Exchange, representing small but significant losses in the wake of the Kalshi news. Still, the growth of the prediction market exchange has contributed to DraftKings’ stock falling 20% and Flutter’s by 9% over the past month.
On October 10, Kalshi announced that it had raised $300 million in new funding. The valuation placed the company at $5 billion. Notably, that is more than double the $2 billion valuation after the previous funding round in June.
Existing major investor Sequoia Capital led the funding round. Additional new investors were Andreessen Horowitz, Paradigm, and Coinbase Ventures, along with other smaller participants.
Kalshi claims to have overtaken its chief rival, Polymarket, which also announced significant funding, by controlling a majority of the market share in prediction markets. It claims it holds a global market share of more than 60%.
Kalshi Expands Offerings, Global Footprint
In addition to increasing its funding and surpassing Polymarket in market share, Kalshi has also made significant strides into the territory of more traditional sportsbooks. It now offers prop bets and parlays, which are becoming increasingly liquid markets on its platform.
For the most recent Thursday Night Football game, Kalshi saw $1.26 million traded on same-game parlays. Additionally, over $298,000 was traded on multi-game parlays, areas where sportsbooks traditionally enjoy a key advantage.
These moves have been accompanied by an enormous expansion in Kalshi’s operating footprint, with the company announcing that over 140 countries can now access it.
While the rapid expansion has significantly increased both trading volume and valuations for the platform, it is also likely to put Kalshi on a collision course with regulators.
Even within the US, previously the only country where the platform could be accessed, several lawsuits and cease-and-desist orders from state gaming regulators are pending. Most notably, Massachusetts has called Kalshi contracts “illegal and unsafe sports wagering.”
So far, no US court has recognized Kalshi’s business model as operating a sportsbook. However, it remains to be seen whether any of the pending lawsuits will be successful or whether European regulators will take a similar view.
Without having to register as a sportsbook, Kalshi enjoys significant structural advantages over rivals like DraftKings and FanDuel, including exemption from state taxes on gross gaming revenue.
Kalshi Founders Praised for Growth
Speaking on the new funding, Sequoia partner Alfred Lin praised the platform’s co-founders, Tarek Mansour and Luana Lopes Lara, for the rapid growth, saying: “Tarek and Luana’s bold vision to make prediction markets mainstream initially drew us to partner with Kalshi in 2020.
“Since then, they’ve built a category-defining company that represents the future of how markets democratize information. We’re excited to deepen our partnership as Kalshi redefines what it means to have an opinion about the future.”
Analyst Reactions & Market Sentiment
Analysts have offered mixed reactions to the stock declines of DraftKings and Flutter amid Kalshi’s growth.
On October 9, Berenberg upgraded DraftKings from Hold to Buy but trimmed its target from $45 to $43. It stated that the sell-off was “unjustified.” Also, there had been “no fundamental change in demand” related to prediction markets.
Jefferies, on October 6, maintained a Buy rating with a reduced target of $51. It noted that DraftKings may eventually enter the prediction-market space if regulation permits. Morgan Stanley similarly urged investors to “buy into the weakness.” It argued the market had overreacted to Kalshi’s moves.
Flutter drew a more muted response. Citizens Bank reiterated its Market Outperform rating and $340 target. Meanwhile, Jefferies called the recent 10% drop “an overreaction,” maintaining a Buy rating and $380 target. Analysts emphasized that FanDuel’s customer scale and brand depth provide insulation from emerging competitors.
Despite the declines, consensus forecasts across both stocks remain positive. Several firms expect recovery once investor focus shifts back to earnings momentum and regulatory clarity around prediction markets.
