Business Model & Competition - Draft Kings' business model is invalidated due to peer-to-peer prediction markets eliminating the house edge [1] - Polymarket offers better odds and doesn't ban profitable bettors, attracting Draft Kings' users [3] - Better odds are the ultimate customer acquisition deal [3] User Acquisition & Spending - Draft Kings heavily invested in user acquisition through free bets and promotions due to the online sports betting supercycle [2] - Draft Kings overspent on users who are likely to switch to competitors with better offerings [2][3] Risk Factors - Draft Kings faces an extinction-level event due to the shift of users to platforms with better odds and policies [3] - Draft Kings bans profitable bettors [3]

Core Viewpoint - DraftKings Inc. (NASDAQ:DKNG) is identified as a strong investment opportunity with over 50% upside potential following a rating upgrade from Berenberg analyst Jack Cummins, who changed the stock rating from Hold to Buy and adjusted the price target from $45 to $43 [1][2]. Company Overview - DraftKings Inc. operates in the digital sports entertainment and gaming sector, offering a range of services including online casino, online sports betting, retail sportsbook, daily fantasy sports, media, and other consumer products [3]. Market Context - The recent volatility in prediction markets and the decline in share prices of gambling companies have created new investment opportunities, prompting Berenberg to upgrade DraftKings based on valuation after a recent selloff [2].