Analyst Says Fears About Kalshi Impact on DraftKings (DKNG) 'Not Substantive'

We recently published Top 10 Trending Stock Ratings and Calls as Tom Lee Says Latest Selloff is a Buying Opportunity. DraftKings Inc (NASDAQ:DKNG) is one of the top trending stock ratings and calls.

David Katz, gaming, lodging and leisure analyst at Jefferies, said in a latest program on CNBC that the notion that prediction market Kalshi is having a negative impact on DraftKings Inc (NASDAQ:DKNG) lacks weight based on his research. Here is what he said:

“The narrative that Kalshi is taking share that would otherwise go to DraftKings Inc (NASDAQ:DKNG), we believe, is not substantive. We’ve done a fair amount of work on what the prediction markets are doing, how they operate, and how that relates to the numbers they are putting out. While they have made some progress, what they are really excelling in is the debate over the legality of swap contracts—whether what they are doing counts as a swap and is therefore federally regulated. Meanwhile, state gaming regulators have warned DraftKings Inc (NASDAQ:DKNG) and FanDuel that they should not participate in prediction markets, either in their states or elsewhere, because they consider it illegal gaming. This is keeping them on the sidelines. If a regulatory or legal conclusion could be reached—which we don’t expect anytime soon— DraftKings Inc (NASDAQ:DKNG), FanDuel, and similar companies would likely perform very well, probably much better than Kalshi, in our estimation.”

Brown Advisory Large-Cap Growth Strategy stated the following regarding DraftKings Inc. (NASDAQ:DKNG) in its second quarter 2025 investor letter:

“We initiated positions in DraftKings Inc. (NASDAQ:DKNG) and Fair Isaac Corporation (FICO) during the quarter. DraftKings (DKNG) is a leader in the rapidly expanding U.S. online gaming and sports betting market, capitalizing on ongoing state-by-state legalization and a growing total addressable market. As a co-leader in the industry, DraftKings is uniquely positioned to benefit from favorable regulatory trends and increased consumer adoption. The company is demonstrating improving economics, supported by disciplined cost management and operational leverage. With continued expansion, product innovation, and a strong brand, DraftKings is well-equipped to capture additional market share and sustain long-term growth.”

While we acknowledge the potential of DKNG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.