---
title: "DraftKings Gets Rare Sell Rating as Kalshi, Polymarket Threaten Growth"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/286449642.md"
description: "DraftKings Inc. faces challenges as BNP Paribas issues a rare sell rating, citing competition from Kalshi and Polymarket in the sports prediction market. The analyst warns that these markets could hinder DraftKings' growth and margin expansion, with over 50% of Kalshi and Polymarket users also using DraftKings. The stock has dropped 27% this year and is down 65% from its peak in March 2021. Muir-Sands sets a price target of $20, indicating a potential 20% downside, while noting the slow uptake of DraftKings' prediction market app and potential regulatory risks."
datetime: "2026-05-14T17:32:03.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/286449642.md)
  - [en](https://longbridge.com/en/news/286449642.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/286449642.md)
---

# DraftKings Gets Rare Sell Rating as Kalshi, Polymarket Threaten Growth

The rapid expansion of sports prediction markets is hurting DraftKings Inc., according to the stock’s only bear on Wall Street.

BNP Paribas started coverage on the sports betting company Thursday with the stock’s only sell-equivalent recommendation, flagging the “” of Kalshi Inc. and Polymarket over the last year. The risks loom even though DraftKings rolled out its own prediction market app in December, said analyst in a note to clients.

“The aggressive expansion of federally regulated prediction markets looks set to significantly dampen DraftKings’ growth and moderate margin expansion,” Muir-Sands wrote.

According to a survey by BNP Paribas, there is a “significant overlap” between prediction-market and DraftKings users. More than 50% of Kalshi and Polymarket users are also using DraftKings sportsbook, according to Muir-Sands.

While DraftKings shares flip-flopped on Thursday, they have been down 27% so far this year, and are 65% from its peak in March 2021.

Additionally, he said a growing anti-gambling sentiment in the US could lead to tighter ‘responsible gambling’ rules or higher taxes.

“We see risks to earnings, especially if tax rates rise whilst valuation multiples still seem stretched despite the shares’ 65% decline from their historic peak,” said Muir-Sands, adding that the risks have not yet been fully priced in.

Muir-Sands has a price target on the stock of $20, which implies a 20% downside from Wednesday’s closing price. It is the lowest among analysts tracked by Bloomberg.

While DraftKings and other online sports betting companies like Flutter Entertainment Plc-owned FanDuel have launched their own prediction-market apps, the uptake has been slow, Muir-Sands said.

DraftKings and FanDuel only account for 10% of all prediction-app downloads, according to the analyst. Even when including core sportsbook and casino apps, Kalshi downloads exceed those of leading sportsbooks.

As major organizations like Major League Baseball and the Ultimate Fighting Championship announce partnership deals with Polymarket, the key to prediction markets’ into sports events is whether they are “curtailed legally or legislatively,” he said.

However, Muir-Sands noted that it could be after 2028 “before the ‘rules of the game’ are finally settled.”

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