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Prediction markets draw investor concern as sportsbook growth faces competition

Deals & M&A

Prediction markets have become a concern for investors in sports betting companies, the report said, citing declines in Flutter Entertainment and DraftKings shares. H2 Gambling Capital forecast regulated Super Bowl handle of $1.78bn, while estimates cited for prediction-market bets linked to the game reached $630m. BetMGM chief executive Adam Greenblatt said he could not identify an impact attributable to prediction markets.

Sportsbook operators and investors are assessing whether prediction markets are diverting betting activity from regulated apps.

End-of-day close Flutter (FLUT), USD, to 26 March 2026
Story date26 December 202526 March 2026

Latest reported results

Flutter NYSE: FLUT

Quarter ended 30 September 2026

Revenue
USD 3.87bn
Operating income
−USD 1.19bn10-Q filing 0001635327-26-000059

DraftKings NASDAQ: DKNG

Quarter ended 30 September 2026

Revenue
USD 1.33bn10-Q filing 0001883685-26-000041
Operating income
−USD 493.1m10-Q filing 0001883685-26-000041

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Regulation

Stock-linked prediction markets draw US scrutiny over regulatory jurisdiction

Stock-linked contracts offered by Polymarket and Kalshi face scrutiny over whether the CFTC or SEC should oversee them, citing Reuters coverage carried by Moneycontrol on 28 September. Legal and policy experts warned that growth in these markets could affect underlying share trading and complicate enforcement against misconduct.

A Reuters report carried by Moneycontrol on Sept. 28 says stock-linked prediction markets run by Polymarket and Kalshi are attracting fresh attention, and it leaves open whether the CFTC or the SEC ought to serve as their main supervisor. Such contracts allow bets on share price movements, company figures and corporate events. According to legal and policy specialists who spoke to Reuters, if the sector keeps expanding it may in time influence how the underlying shares trade and make it harder for regulators to detect and pursue wrongdoing.

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