DraftKings revenue drops 40% during Wild Card Weekend – What went wrong?

DraftKings sports betting revenues come under massive pressure. On Friday, the company’s stock dropped 8% after data from the New York State Gaming Commission painted an alarming picture: sports betting revenues during NFL Wild Card weekend plummeted by 40%. The commission reported gross gaming revenues of $37.3 million for the week ending January 11 — a dramatic decline compared to $62 million in the same period last year.

The Wild Card weekend was supposed to be a golden opportunity for betting operators. Piper Sandler analysts documented that all six NFL games during this period generated significant activity on prediction market platforms — five of the season’s highest-volume games took place here. Yet, while these alternative platforms boomed, the expected revenues for traditional sports betting providers remained absent.

Prediction Market Platforms Steal Revenue from Traditional Bookmakers

The core issue is a massive behavioral shift among bettors: they are increasingly moving their activity to alternative prediction market platforms instead of using traditional sportsbooks. This shift explains the paradoxical finding — high betting volume coinciding with falling revenues for DraftKings and its competitors.

Flutter Entertainment, the company behind FanDuel, was not spared from the debacle. Its shares fell 4% on the same day. The entire gaming sector felt the impact: Caesars Entertainment dropped 2.5%, Wynn Resorts 2%, MGM Resorts 2%, and Las Vegas Sands 2.5%. The numbers from the New York State Gaming Commission reveal a structural change in the betting market that fundamentally threatens traditional providers.

NCAA Increases Pressure — Regulation Threatens Growth Strategy

At the same time, the NCAA significantly intensified its stance. The organization urged the Commodity Futures Trading Commission to halt college sports betting markets entirely until stricter national regulations are implemented. This marks a substantial escalation in the fight against betting platforms focused on college sports.

For DraftKings, this creates considerable regulatory risks around a key market segment. College sports betting has become a major revenue driver for the industry. A potential federal ban could force companies to fundamentally rethink their growth strategies. The NCAA justified its demand with concerns over potential impacts on student-athletes — an argument that carries significant political weight.

Analyst Euphoria Fades — Market Valuation Comes into Question

The timing could not have been worse. Wells Fargo had just upgraded DraftKings from “Equal-Weight” to “Overweight” the day before and raised its price target from $31 to $49. The bullish stance was partly based on optimism about new markets — lawmakers in Georgia planned to allow up to 18 online sports betting operators, potentially opening a lucrative new market.

However, this optimism quickly burst. The combination of weak Wild Card revenues and the NCAA counteroffensive overshadowed the positive Georgia news entirely. The stock is now trading at $32.68, 38.9% below its 52-week high of $53.49 from February 2025. Since the start of the year, the share has already lost 8.3% in value.

DraftKings has become one of the most volatile names in the gaming sector — last year, the stock experienced 22 price movements of more than 5%. This volatility reflects the uncertainty stemming from both market shifts and regulatory threats. The company’s revenues are under pressure from multiple fronts: technological disruption by prediction market platforms, regulatory threats to college sports, and the overall volatility of the gaming sector.