DKNG
The Bear Cave is back in the sportsbook pen
Short-seller outlet The Bear Cave dropped a new report on DraftKings and basically said: the prediction market wave is coming, and DKNG might be standing in the splash zone.
The thesis is pretty blunt. The report argues that Kalshi’s growth is coming at DraftKings’ expense, not just as a cute side hustle for sports nerds, but as a real threat to traditional sportsbooks. Translation: if users keep drifting toward prediction markets, that’s one more headache for a stock that’s already taken a beating.
Why investors care
The Bear Cave pointed to a few things to make its case:
- Kalshi has reportedly crossed $100 billion in cumulative volume and is doing around $10 billion in weekly notional volume.
- Apptopia data showed daily active users at DraftKings, FanDuel, BetMGM, and Caesars peaking around the World Cup and then sliding hard by month-end.
- The report says the share of DraftKings users who also opened Kalshi rose from 12% to 17.4% in a few weeks.
That’s the kind of stuff that makes investors squint at their screen and ask, “Wait, is this a passing fad or the next leak in the bucket?”
The counterpunch is still in the ring
DraftKings has been saying its predictions product is growing fast, and analysts haven’t exactly rushed for the exits. Morningstar has called prediction markets more opportunity than threat, while TD Cowen and JPMorgan both recently raised their price targets.
So this isn’t a clean knockdown. It’s more like a crowded bar fight where everyone has a theory and nobody’s leaving early.
Big picture
For DKNG, the key question is whether prediction markets are a niche distraction or the beginning of a real share shift in how people bet. If The Bear Cave is right, the risk isn’t just competition — it’s cannibalization with better branding.