Kalshi Creating Problems for DraftKings, Says Bear Cave

• Kalshi execution beating DraftKings
• Consumers “are voting with their fingertips,” says Dorsey
• Kalshi more appealing to sharps, whales

Shares of DraftKings (NASDAQ: DKNG) are off 5.1% today after a research firm published a report noting that Kalshi is besting the sportsbook operator in terms of execution and things could get worse for DraftKings investors before they get better.

In a report out today, Edwin Dorsey, editor and founder of The Bear Cave newsletter, says DraftKings’ value proposition is waning against the backdrop of Kalshi’s superior execution, which includes better breadth and distribution relative to traditional sportsbooks.

Kalshi’s execution has exceeded expectations, while DraftKings continues to fall short,” observes Dorsey. “The Bear Cave believes the gap in execution and long-term business model disruption will become painfully obvious to DraftKings investors in the coming months.”

Shares of DraftKings, the second-largest US online sportsbook operator, are off 35% since Dorsey’s first report on the vulnerabilities of the gaming company exposed by prediction markets behemoth Kalshi.

Kalshi Liquidity, Bet Menu Problematic for DraftKings

When stocks such as DraftKings and FanDuel owner Flutter Entertainment (NYSE: FLUT) tumbled in the back half of 2025, the initial theory was that the gaming companies were being disrupted by prediction markets, but analysts pointed to customer-friendly football outcomes as the real culprit.

Kalshi’s sources of differentiation are also proving advantageous, according to The Bear Cave editor. Said another way, the prediction market operator offers sports and other event contracts gaming companies either shy away from or can’t offer at all.

“Kalshi also hosts novelty markets on what the announcers will say during the game, which brands will advertise during the Super Bowl, who will attend the Super Bowl, and who will perform with Bad Bunny during the halftime show, among many others,” notes Dorsey. “These markets, which are generally not available on DraftKings, as well as Kalshi’s array of non-sports markets, provide another source of differentiation.”

‘Consumers Voting with Their Fingertips’

Last month, downloads of the Kalshi mobile application topped three million for the first time. Additionally, downloads of Robinhood, a Kalshi partner and rising prediction markets force, also beat the figures seen for DraftKings and FanDuel, according to data from Apptopia.

In what may be interpreted as a warning shot to the sports wagering industry, the Apptopia data indicate many of the people downloading Kalshi and Robinhood onto their smart phones are also DraftKings and FanDuel users.

“Apptopia’s consumer device panel is able to measure cross-app overlap, or the percentage of one app’s users who are also using another app,” notes the research firm. “About 10% of DraftKings Sportsbook app users were also using Kalshi in January. The cross-app overlap between Kalshi and the major sportsbooks has been growing almost every month since August.”