Published on: February 5, 2026, 11:44h.
Updated on: February 5, 2026, 11:44h.
- Kalshi outperforms DraftKings in execution
- Consumers are “voting with their fingertips,” claims Dorsey
- Kalshi is increasingly attractive to serious bettors
Today, DraftKings (NASDAQ: DKNG) shares have dropped 5.1% following a report highlighting that Kalshi is outshining the sportsbook operator in execution, with indications that the situation for DraftKings investors might deteriorate further before it improves.
In a report published today, Edwin Dorsey, founder and editor of The Bear Cave newsletter, noted a decline in DraftKings’ value proposition against the backdrop of Kalshi’s superior execution, featuring better breadth and distribution compared to standard sportsbooks.
“Kalshi’s execution has surpassed expectations, while DraftKings continues to lag,” states Dorsey. “The Bear Cave predicts that the differences in execution and long-term business model challenges will become glaringly apparent to DraftKings investors in the near future.”
DraftKings, the second largest online sportsbook in the US, has seen its shares decline by 35% since Dorsey first highlighted the vulnerabilities of the gaming company, made evident by the rise of prediction market leader Kalshi.
Challenges for DraftKings: Kalshi’s Liquidity and Bet Offerings
Initially, when stocks like DraftKings and Flutter Entertainment (NYSE: FLUT) dropped significantly in late 2025, analysts speculated that they were being impacted by prediction markets. However, it became clear that favorable football outcomes for consumers were the main issue.
Fast forward several months, and it’s increasingly recognized that prediction markets are capturing some market share from sportsbooks because they do not impose restrictions on sharp bettors and high-stakes players. Dorsey points out that Kalshi’s liquidity, which is backed by market makers and big bettors, permits the acceptance of a theoretical $5 million wager on the Super Bowl without altering the odds. Conversely, such a large bet would certainly compel traditional sportsbooks to adjust their lines.
Kalshi’s unique offerings are increasingly advantageous, as noted by the editor of The Bear Cave. In other words, the prediction market provider features sports and event contracts that traditional gaming companies often avoid or simply cannot provide.
“Kalshi also offers novelty markets on various topics, such as what comments will be made by announcers during the game, the brands that will advertise during the Super Bowl, who will attend the event, and which artists will join Bad Bunny for the halftime show, among many others,” Dorsey explained. “These unique markets, generally absent on DraftKings, besides Kalshi’s diverse non-sports offerings, create additional avenues for distinction.”
‘Consumers Opting with Their Fingertips’
Last month, the downloads for the Kalshi mobile app reached over three million for the first time. Additionally, the downloads for Robinhood—partnered with Kalshi and emerging as a dominant force in prediction markets—outpaced those for DraftKings and FanDuel, as per Apptopia data.
This trend may serve as a warning to the sports betting sector, as Apptopia’s data indicates that many individuals downloading the Kalshi and Robinhood apps are also existing users of DraftKings and FanDuel.
“Apptopia’s consumer device panel is capable of measuring cross-app usage, which indicates the percentage of one app’s users who also utilize another,” the research firm noted. “Approximately 10% of DraftKings Sportsbook app users were also engaged with Kalshi in January. The crossover between Kalshi and leading sportsbooks has been steadily increasing since August.”