What DraftKings and FanDuel Prediction Market Plays Mean for the Sports Betting Biz

In 2025, sports betting giants FanDuel and DraftKings launched their own prediction markets as a response to the growing competition from players like Polymarket and Kalshi. However, analysts from Bank of America have expressed concerns about these companies being too late to secure a significant market share, downgrading their stock ratings due to declining margins and increased competition. The prediction market sector is thriving, with weekly volumes surpassing $2 billion and projections suggesting a potential market size of $95.5 billion by 2035. Despite the enthusiasm, state regulators are increasingly questioning the federal oversight of these markets, suggesting a clash between federal and state authorities that could escalate to legal disputes. The Nevada Gaming Commission raised concerns about regulatory conflicts, complicating the expansion plans of established sportsbooks into prediction markets. Both DraftKings and FanDuel face the challenge of balancing regulatory compliance with the need to remain competitive in an evolving landscape.

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