DraftKings, Flutter Shares Decline Amid Robinhood's Football Prediction Market Launch

Shares of DraftKings and Flutter Entertainment are down after Robinhood launched football prediction markets, potentially cutting into their market share. Robinhood's peer-to-peer predictions model allows for higher payouts and sidesteps fees, posing a threat to the two companies. DraftKings' stock is down 2.04% and Flutter shares are down 1.01%.

Shares of DraftKings Inc. (DKNG) and Flutter Entertainment (FLUT) are trading lower on Tuesday following the announcement by Robinhood Markets Inc. (HOOD) of the launch of pro and college football prediction markets. The new offering, set to be available to all eligible users in the coming days, could potentially eat into the market share of these companies, as Robinhood's peer-to-peer prediction model offers higher payouts and sidesteps fees.

Robinhood's new prediction markets hub will allow users to trade outcomes on all regular season pro matchups and all college Power 4 schools. JB Mackenzie, VP & GM of Futures and International at Robinhood, stated, "Adding pro and college football to our prediction markets hub is a no-brainer for us as we aim to make Robinhood a one-stop shop for all your investing and trading needs" [1].

The increased competition from Robinhood appears to be weighing on shares of DraftKings and Flutter Entertainment. DraftKings stock was down 2.04% at $44.77, and Flutter shares were down 1.01% at $291.03 at the time of publication, according to Benzinga Pro [1].

The peer-to-peer prediction markets model employed by Robinhood allows for higher payouts and potentially lower fees for users compared to traditional sportsbooks. This could result in higher user engagement and potentially attract a significant portion of the market currently served by DraftKings and Flutter Entertainment.

As Robinhood continues to expand its offerings, it poses a potential threat to companies like DraftKings and Flutter. The company's integrated platform with diversified offerings, including the new football prediction markets, could attract a broader range of users and increase its market share.

References:
[1] https://www.benzinga.com/trading-ideas/movers/25/08/47208888/draftkings-flutter-entertainment-shares-slide-after-robinhood-launches-football-prediction-markets