Kalshi is not having any impact on DraftKings, FanDuel, says Jefferies analyst David Katz

Core Viewpoint - The gambling industry is facing increased competition, particularly with the emergence of companies like Kalshi, which is impacting the stock performance of major players like DraftKings and Flutter [1][3]. Company Performance - DraftKings has seen a nearly 15% decline in stock value, marking its worst week since February [1]. - Flutter, the parent company of FanDuel, has dropped by 9% and is now negative for the year [1]. Regulatory Environment - A recent ruling by a Nevada federal judge stated that sports prediction markets do not qualify as swaps, potentially leading to less regulation for online betting in the future [2]. - State gaming regulators have warned DraftKings and FanDuel against participating in prediction markets, treating them as illegal gaming [5]. Market Dynamics - There is a belief that the narrative surrounding Kalshi taking market share from DraftKings is not substantial [3]. - The prediction markets offered by Kalshi are considered limited and primitive compared to the offerings in legal and regulated sports betting markets [7]. - DraftKings and FanDuel are preparing for a future where state gaming regulators may legalize and regulate prediction markets, which could create a more competitive environment [8]. Analyst Insights - Analysts have noted that the early NFL season has seen fluctuations in luck or hold percentage for legalized operators, leading to downward adjustments in analyst projections [9].