Key Takeaways
- The CFTC has reportedly warned Kalshi that charges may be coming soon over whether it properly told the agency about dozens of new products.
- Needham estimated that Kalshi took 76% of sports prediction-market volume in the NFL’s first week, against 3% for DraftKings’ exchange, as DraftKings plans up to $700 million of Predictions spending this year.
- As reported, the charges are about how Kalshi filed contracts, so they’re unlikely to dent its lead, though Robinhood, which still sends much of its prediction-market volume to Kalshi, has more at stake.
- DraftKings will have to win share with its own money, and its fourth-quarter report in February should show whether the customers it’s paying for are starting to pay it back.
DraftKings (DKNG) is spending up to $700 million this year to catch Kalshi in sports prediction markets. Now Kalshi may be headed for a fight with its regulator.
The Commodity Futures Trading Commission (CFTC) has warned Kalshi that charges may be imminent, Politico reported on Nov. 10, citing a person with direct knowledge of the probe. This matters for Robinhood (HOOD) too, since Kalshi handles much of the prediction-market trading on its app.
A filing problem, as Kalshi tells it
The agency is reportedly looking into whether Kalshi failed to properly notify it about dozens of new products. Kalshi spokesperson Elisabeth Diana told Politico the warning “is about a procedural error” involving a handful of contracts, many of which weren’t live, and added, “We are already addressing the issue.” The report doesn’t say the probe involves sports contracts, which are the ones that compete with DraftKings.
Robinhood has more riding on this. It built its prediction-markets business on Kalshi’s contracts before it launched its own exchange, Rothera. Even so, InGame estimated in July that Robinhood still sent about 60% of its prediction-market volume to Kalshi. Charges that slowed Kalshi’s new listings would hit Robinhood’s main partner, and give it one more reason to move that volume onto Rothera.
TIKR tracks 37 analysts on DraftKings. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on DraftKings, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See DraftKings’ Analyst Ratings
DraftKings is paying up from far behind
Needham estimated that Kalshi took 76% of sports prediction-market volume in the NFL’s first week in September, against 3% for DraftKings’ own exchange. DraftKings is spending to close that gap, and the bill just got bigger: up to $700 million of Predictions spending this year, which sent the stock down 21% on Nov. 6.
Analysts now expect EBITDA of $230 million this year, down from $620 million in 2025, then a rebound to $932 million in 2027:
CEO Jason Robins has guided for about $500 million of Predictions gross profit in 2027. So that rebound assumes the customers DraftKings is buying now start paying for themselves next year.
The sportsbook hasn’t felt it yet
What Kalshi really threatens is DraftKings’ sportsbook, which brought in $3.8 billion of the company’s $6.1 billion of revenue in 2025. Kalshi sells its sports contracts across state lines under federal rules and pays no state gaming tax. DraftKings paid $2.1 billion of gaming taxes in 2025, or 34.9% of its revenue.
So far, the sportsbook is holding up. In DraftKings’ third-quarter business update, Robins wrote that prediction market operators are having “no discernible impact on our Sportsbook business.” Sports revenue, which also includes Predictions, rose 31.5% to $783.6 million in the quarter. Total revenue rose 16% to $1.33 billion in the quarter to Sept. 30, from $1.14 billion a year earlier:
Don’t count on the CFTC to close the gap
Kalshi may well face charges. But as reported, they’re about how it filed contracts, and that’s unlikely to dent a 76% share or take sports contracts away in DraftKings’ states. The case that could end those contracts is at the Supreme Court, where three petitions ask whether sports event contracts are federal swaps. DraftKings’ downside plan assumes sports contracts end in July 2028, though a ruling could come sooner. Even then, Robins wrote in the same business update, the 2027 cohort of Predictions customers should fully pay back “within four years without sports contracts.”
If the probe widens to how sports contracts get listed, though, DraftKings’ own exchange answers to the same regulator.
DraftKings will have to buy its share with its own money, and the Nov. 10 report doesn’t change that. The next real read comes with fourth-quarter results in February, which should show whether the customers it’s paying for are starting to pay it back.
So what is DraftKings stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what DraftKings could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
