Flutter, DraftKings slide on new Kalshi parlay-like NFL contracts

Shares of Flutter Entertainment (FLUT) and DraftKings (DKNG) are under pressure on Tuesday after the U.S. prediction markets operator Kalshi launched a new same-game parlay-style product on NFL matches on Monday. Commenting on the developments, Jefferies says that it views the weakness in Flutter’s shares as “an overreaction.”

PARLAY-LIKE CONTRACTS: Jefferies analyst James Wheatcroft calls today’s weakness in Flutter’s shares “an overreaction” to U.S. prediction markets operator Kalshi having launched a new same-game parlay-style product on NFL matches on Monday. Recall, prediction market operators have made headlines in recent months, but have lacked the product depth of online sports betting operators, the firm argues. Kalshi’s new customizable product resembles the same-game parlay product offered by sportsbooks, albeit with limiting features, Jefferies adds.

With that said, the firm sees prediction markets continuing to make “little dent” in Flutter’s market share, given that consumers want breadth and depth of parlays across markets, games and sports, says the analyst, whose analysis also suggests Flutter offers superior pricing on many key markets, including player props. The firm keeps a Buy rating and $380 price target on Flutter shares.

PRICE ACTION: In afternoon trading, shares of Flutter have dropped about 10% to $255.37, while DraftKings’ stock has slipped over 11% to $37.53.