FanDuel Founder Eccles Says Kalshi Traveling Same Road as Juul, Skillz

• FanDuel co-founder says Kalshi needs to pull back or risk meeting a similar outcome to that of vaping company Juul
• He says Kalshi advertising is aggressive and likely to be ineffective
• He also made comparisons between Kalshi and Skillz

FanDuel co-founder Nigel Eccles said Kalshi is traversing a path comparable to that of vaping company Juul, adding that if the prediction market operator isn’t careful, it could meet similarly dubious end.

In a recent post on X, Eccles laid out the comparison between Kalshi and Juul, which was one of the pioneers in the vaping industry.

For those that don’t remember, Juul was one of a number of the main vaping brands in the 2010s,” opined Eccles. “It took a product that had a social good (helping smokers quit) but then aggressively pushed it into a new market, non-smokers and particularly kids. (See the similarity?).”

Juul’s heyday culminated in Altria (NYSE: MO) taking a 35% stake in the company in 2018, valuing it $38 billion. Due to rising regulatory scrutiny on Juul’s alleged teen-focused marketing techniques, the company’s valuation plunged by 85% in just two years and by 2022, Altria lost 95% of its investment in the firm.

Eccles Questions Kalshi Advertising Techniques

Among the myriad controversies swirling around Kalshi and other prediction market operators is the framing of event contracts as an asset class markedly different than traditional betting.

“I’ve worked in the online gaming industry for over 25 years, all over the world,” he added in the X post. “This type of marketing is actually extremely rare in real money gaming. Firstly and most importantly it is rare because operators view it as highly unethical. It might surprise you that a lot of people in the gaming industry do actually care about things like underage and problem gambling.”

He points out the gambit is a risky one for companies like Kalshi because as young people lose money on those platforms, they’re likely to eventually throw in the towel and not return, meaning customers are churning rather than becoming sticky.

Another Dubious Comparison

Eccles didn’t stop there. He noted that some Kalshi advertisements position prediction markets as supplemental income for users — a tactic previously employed by skill gaming platform Skillz (NYSE: SKLZ), which also isn’t a stranger to controversy.

“The only other company I can think of that pushed this type of advertising was Skillz who aggressively pushed the ‘second income’ line,” said Eccles.

The FandDuel co-founder rightfully points out that Skillz stock has suffered mightily. Since the company went public in December 2020, the shares have lost 98% of their value while subjecting investors to reverse splits along the way.