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Gambling and sports industry journalist Darren Rovell tweeted out this past week:
"In shareholder letter this week, DraftKings said that in fiscal 2025, they took in $54 billion in bets with potential liability from those bets being being $2.5 TRILLION."
Indeed, DraftKings and FanDuel's stock were both getting crushed Friday and hitting three year lows. DraftKings was down 13.51% on Friday to 21.76 USD while FanDuel fell 11.46% to 125.7 USD
The big fear is prediction markets, according to Outkick founder Clay Travis.
Maybe.
MessMakinMoney Chimed in with this:
I'm only on Kalshi now. I've done over $4 million in volume since Jan 1st when I switched.
The limits from FanDuel and DraftKings are unbelievably penalizing. We've all heard of Vegas limiting huge bettors when move lines. But FD and DK limit all bettors (even basic break-even ones like myself) to where I can't get down more then $5 on a alt line or player prop.
Imagine if Schwab or Fidelity limited profitable traders. Of course they don't because every buyer needs a seller, and it's in effect peer-to-peer. That's how prediction markets work. They don't impose limits and liquidity is hardly ever an issue to get in the trade I want to make.
Add on top of this the OBBBA tax change reducing loss deductions to 90% from 100% (eliminating arbitrage bettors) for FD and DK, while PMs have no such limitation, and it's obvious why their stocks are falling. The critical mistake FD and DK made was not lobbying harder to get the OBBBA tax change overturned. Bettors like myself went to PMs and realize how much easier it is to get volume down on trades.
As for Rovell's post, some on X took exception, suggesting the so-called "liabilities" are anything but.
Daxson Dart write:
"It's not potential liability, everyone's 12 leggers aren't going to hit all at once They made a killing at almost no risk, gambling isn't a game of skill or luck, just numbers and the house has the advantage always."
Kev noted:
"While DraftKings probably has the most lenient rules on allowing longshot payouts (wager at least $10), you can't win more than 5 mil... FanDuel and BetMGM both really limited payouts with million dollar longshots, so I'm surprised DK is still exposing themselves to black swans."
Then there was this from Mr. Grant:
"Read this again slowly. $54 billion flowed INTO DraftKings from bettors. The company turned that into revenue, profits, and shareholder value. The bettors got entertainment. The shareholders got wealth. Every dollar you gamble is a dollar someone else invests. Pick your side."
- Chris Costigan, Gambling911.com Publisher
