Problems at DraftKings (DKNG) #4
Over the last year, The Bear Cave has published four articles about DraftKings (NASDAQ: DKNG — $12.5 billion), highlighting competitive risks posed by prediction markets like Kalshi:
“Problems at DraftKings (DKNG)” (September 18, 2025)
“More Problems at DraftKings (DKNG)” (October 2, 2025)
“Betting on Tomorrow: A Primer on Prediction Markets” (November 6, 2025)
“Even More Problems at DraftKings (DKNG)” (February 5, 2026)
Since our first article, DraftKings stock has fallen ~40%. The Bear Cave believes the case against DraftKings is even more compelling today.
In February 2026, The Bear Cave wrote:
Kalshi’s execution has exceeded expectations, while DraftKings continues to fall short. 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.
Kalshi’s growth is fueled by ad campaigns, earned media, social virality and, above all, superior depth, breadth, and distribution compared to traditional online sportsbooks.
The results speak for themselves:
Today, Kalshi’s execution looks even stronger: cumulative volume has exceeded $100 billion, and weekly notional volume is about $10 billion.
The Bear Cave believes that Kalshi’s growth will ultimately come at the expense of DraftKings, first slowly, then rapidly.
DraftKings investors have repeatedly dismissed the threat from prediction markets, arguing that:
Prediction markets have worse odds.
Prediction markets don’t have enough liquidity.
Prediction markets lack the distribution and customer base to reach a critical mass.
Prediction markets can’t handle live in-game betting.
Prediction markets can’t handle whales.
Prediction markets can’t do props.
Prediction markets can’t do parlays.
Now, investors believe prediction market risk is priced in.
The Bear Cave strongly disagrees.
Disclosure: The Bear Cave is now owned by Hunterbrook Media. Hunterbrook Media’s investment affiliate, Hunterbrook Capital, does not have any positions related to this article at the time of publication. Positions may change at any time. Please see full disclosures here.
