DraftKings Plummets 7.8% Amid NFL Betting Woes and Regulatory Headwinds – What’s Next?

Summary
• DraftKings (DKNG) tumbles 7.8% to $32.68, its worst intraday drop since late 2024.
• NFL Wild Card weekend betting revenue plunges 40% year-over-year in New York, signaling sector-wide challenges.
• NCAA pushes for federal halt on college sports betting, adding regulatory uncertainty.

Shares of DraftKings are in freefall after a confluence of sector-specific headwinds and regulatory turbulence. The stock has traded as low as $32.47 and as high as $35.19, reflecting volatile sentiment. Analysts and investors are now parsing whether this selloff is a buying opportunity or a deeper structural warning.

NFL Wild Card Revenue Plunge and NCAA Regulatory Concerns Trigger DKNG Selloff
The immediate catalyst for DraftKings’ collapse stems from a 40% year-over-year decline in online sports betting revenue during the NFL’s Wild Card weekend in New York, as reported by the New York State Gaming Commission. This drop, attributed to shifting bettor behavior toward prediction markets and alternative platforms, has rattled confidence in the sector. Compounding the issue, the NCAA’s recent request to the Commodity Futures Trading Commission (CFTC) to halt college sports betting markets has introduced regulatory uncertainty. The dual pressures—revenue erosion and potential regulatory overreach—have triggered a flight to safety, with DKNG’s 7.8% drop mirroring broader declines in peers like Caesars and Wynn.

Casinos & Gaming Sector Under Pressure as Flutter (FLTR) Holds Steady
While DraftKings’ 7.8% decline is stark, the broader Casinos & Gaming sector is not immune. Flutter Entertainment (FLTR), the sector’s leader, is up 0.06% intraday, suggesting divergent investor sentiment. However, regional operators like Caesars (CZR) and Wynn (WYNN) are down 2.5%–2%, reflecting shared vulnerabilities in sports betting and iGaming. The sector’s struggles highlight a fragile ecosystem where regulatory shifts and consumer migration to prediction markets are reshaping competitive dynamics.

Options Playbook: Capitalizing on DKNG Volatility with Strategic Put and Call Selection
• MACD: 0.32 (bullish divergence), Signal Line: 0.44 (bearish crossover), Histogram: -0.12 (negative momentum)
• RSI: 55.38 (neutral, near oversold threshold)
• Bollinger Bands: Upper $36.06, Middle $34.82, Lower $33.58 (price near lower band)
• 200D MA: $37.59 (price 16% below long-term trend)
• Support/Resistance: 30D $34.54, 200D $35.03 (key levels breached)

DKNG’s technicals suggest a bearish near-term bias, with the 200-day moving average acting as a formidable resistance. The RSI’s proximity to oversold territory hints at potential short-covering, but the MACD’s bearish crossover signals caution. For options traders, two contracts stand out:

• DKNG20260123P31 (Put, $31 strike, 1/23 expiration):
- IV: 47.28% (moderate volatility)
- Leverage Ratio: 121.28% (high reward potential)
- Delta: -0.203 (moderate sensitivity to price moves)
- Theta: -0.0044 (slow time decay)
- Turnover: 8,520 (liquid)
- Gamma: 0.123 (responsive to price swings)
This put option offers asymmetric upside if DKNG breaks below $31, with leverage amplifying gains in a bearish scenario. A 5% downside to $30.79 would yield a payoff of $0.79 per contract, or 790% return on a $100 investment.

• DKNG20260123C34 (Call, $34 strike, 1/23 expiration):
- IV: 42.28% (reasonable volatility)
- Leverage Ratio: 90.96% (moderate reward)
- Delta: 0.289 (moderate directional exposure)
- Theta: -0.0913 (aggressive time decay)
- Turnover: 415,440 (high liquidity)
- Gamma: 0.167 (high sensitivity to price swings)
This call is ideal for a rebound trade, capitalizing on potential short-covering if DKNG stabilizes above $34. A 5% rebound to $34.31 would yield a $0.31 payoff, or 310% return on a $100 investment.

Aggressive bulls may consider DKNG20260123C34 into a bounce above $34.

Backtest DraftKings Stock Performance
The performance of DKNG after an intraday plunge of -8% from 2022 to the present has shown positive returns, with the maximum return during the backtest period being 7.26%. The 3-day win rate is 53.53%, the 10-day win rate is 53.32%, and the 30-day win rate is 57.47%, indicating a higher probability of positive returns in the short term. The maximum return day during the backtest period was on January 16, 2026, which suggests that DKNG has the potential for recovery after a significant intraday drop.

DKNG at Pivotal Crossroads: Watch $32.5 Support and Regulatory Developments
DraftKings’ 7.8% drop has exposed vulnerabilities in its sports betting model and regulatory environment. While the stock’s technicals suggest a bearish near-term outlook, the RSI’s proximity to oversold levels and analyst upgrades (e.g., Morgan Stanley’s $53 PT) hint at potential rebounds. Investors should monitor the $32.5 support level and the NCAA’s CFTC request for regulatory clarity. Meanwhile, sector leader Flutter (FLTR) remains resilient, up 0.06% intraday, offering a contrast to DKNG’s struggles. Watch for $32.5 breakdown or regulatory reaction.