EXCLUSIVE: DraftKings Is Validating Kalshi’s Market While Trying to Take It, Says Investor With Stakes in Both Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.
DraftKings Inc. (NASDAQ:DKNG) missed revenue expectations last week, but prediction markets dominated the earnings call
To Joel Shulman, founder and chief investment officer of ERShares and portfolio manager of the XOVR ETF, the message was clear: DraftKings is now treating prediction markets as a business worth fighting for. Asked whether DraftKings is validating Kalshi’s market or trying to take it, Shulman chose both. “Both, and the validation is the more important signal,” Shulman told Benzinga. “…[A] year ago prediction markets were widely treated as a regulatory curiosity. Today the largest U.S. sportsbook has built its own exchange, is spending heavily against the category and is telling investors it expects to win it.” Shulman disclosed that XOVR holds Kalshi through a special purpose vehicle and owns DraftKings in its public portfolio.
He is also a co-founder of Signal Markets, a CFTC-regulated introducing broker in event contracts. Draftkings Quarter Was Weaker Than It Looked “It was a weak quarter, and the deterioration goes well beyond a single line item,” Shulman said. Revenue fell about 5% to $1.44 billion, missing consensus estimates, even as adjusted EPS beat expectations.