The battle of prediction markets versus traditional online sportsbook companies continues to heat up as more consumers test the waters of the newer option to wager on sports outcomes and other markets.
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Prediction Markets vs. Sportsbooks
The rise of private prediction market companies such as Kalshi and Polymarket has put pressure on publicly traded sportsbook companies like DraftKings Inc (NASDAQ:DKNG) and Flutter Entertainment Inc (NYSE:FLUT).
Publicly traded companies such as Coinbase Global Inc (NASDAQ:COIN) and Robinhood Markets Inc (NASDAQ:HOOD) have also highlighted strong growth of prediction markets for their consumers, which could mean growth of the overall market and/or taking market share from sportsbooks.
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There are multiple advantages that prediction markets currently have, including being able to be offered in some states where sportsbooks are illegal. Prediction markets also offer wagers on many non-sports markets that sportsbooks normally don’t touch.
Prediction markets have also faced legal challenges and the battle in many states is far from over.
Benzinga polled its viewers on "PreMarket Playbook" on Oct. 5 to hear what the current thought is on the heated battle.
"Will prediction markets make sports betting stocks extinct?" Benzinga asked.
The results from 116 viewers are:
- Yes, $DKNG and $FLUT are toast: 17%
- No, sportsbooks will adapt: 28%
- They’ll merge into one industry: 22%
- Too early to tell: 32%
Benzinga "PreMarket Playbook" runs Monday through Friday at 8 a.m. ET on YouTube.
The leading vote-getter was that it is too early to tell, which comes as prediction markets are still relatively new and face continued legal challenges.
Outside of that, the next highest vote-getter was that sportsbooks will adapt, which is currently happening.
Both DraftKings and Flutter have launched their own prediction markets in the U.S., allowing their existing users to place wagers on prediction markets. The platforms are also a tool to land new customers and could increase market share as more states officially legalize sports betting.
The End of Sportsbooks?
The lowest vote-getter in the poll was that DraftKings and Flutter are toast as a result of prediction markets, with 17%. This translates to around one in six Benzinga viewers saying that prediction markets will be the end of these two companies.
While this is only a small sample size in the Benzinga poll, this could be good news for the sportsbook companies. However, a look at the stock prices of DraftKings and Flutter, it would appear that more people think the end is near.
DraftKings stock is down 44.4% year-to-date in 2026, recently hitting its lowest levels since April 2023.
Flutter stock is down 65.1% year-to-date in 2026, with shares trading near their March 2020 lows.
Online sportsbooks likely have no choice but to continue to offer prediction markets and compete with the market leaders in the sector. There could also be a rush of consolidation among sportsbooks and prediction market companies as the various companies in both sectors look to combine efforts to gain market share and push forward.
Photo: Shutterstock
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