DraftKings (NASDAQ:DKNG) shares climbed 2.3% while Flutter Entertainment (NYSE:FLTR), the parent company of FanDuel, advanced 2.7% as the prediction market space drew scrutiny just days before the Super Bowl.
The spike in equity prices coincided with a public dispute between Kalshi Inc., the largest U.S. prediction market, and data startup Juice Reel. Bloomberg reported that the disagreement began after a stock analyst cited Juice Reel data suggesting that users on prediction markets were losing money at a faster pace than those using conventional gambling apps.
Tensions between the two firms intensified when Kalshi accused Juice Reel of "extortion." Juice Reel's founder countered by defending the accuracy of the data and asserting that Kalshi had pressured him to withdraw the findings. Kalshi later softened its initial extortion allegation but continued to challenge the conclusions drawn from the data.
Despite the debate, traditional sports-betting platforms appear to retain a dominant position in consumer usage. Sensor Tower data shows that although Kalshi's prediction market app experienced a lift in downloads during the NFL playoffs, the sports-betting applications operated by DraftKings and FanDuel continue to post substantially higher national usage rates.
The timing of the controversy aligns with a period of increased wagering activity as bettors prepare for Sunday’s Super Bowl matchup between the Seattle Seahawks and the New England Patriots - an event that typically drives elevated engagement across betting channels.
Market reaction in the form of modest share gains for DraftKings and Flutter suggests investor attention to both the near-term betting event and the broader competitive dynamics between prediction markets and established sports-betting apps. The dispute itself centers on data interpretation and the credibility of third-party analytics in assessing user outcomes on newer prediction platforms.
Clear summary
DraftKings and Flutter shares rose after a public dispute between Kalshi and Juice Reel over data indicating higher losses for prediction market users. Sensor Tower data shows DraftKings and FanDuel apps maintain much higher national usage than Kalshi, even as Kalshi saw download gains during the NFL playoffs.
Key points
- DraftKings stock increased 2.3% and Flutter Entertainment shares rose 2.7% amid the prediction market controversy.
- The conflict involves Kalshi and data startup Juice Reel, with allegations and counterclaims about data accuracy and pressure to retract findings.
- Sensor Tower figures indicate sustained higher national usage for DraftKings and FanDuel apps compared with Kalshi, despite Kalshi seeing download growth during the playoffs.
Risks and uncertainties
- The debate over Juice Reel’s data and Kalshi’s response creates uncertainty about the reliability of third-party analytics when evaluating prediction market user outcomes.
- Public disputes between market operators and data providers could affect consumer perception and adoption of prediction market apps versus traditional sports-betting platforms.
- Elevated betting activity around the Super Bowl may temporarily alter app usage patterns, complicating comparisons of longer-term market share and engagement.