Front Running: DraftKings Weighing Stock Trading?
Prediction markets news and insight from Eilers & Krejcik Gaming—ahead of the crowd.
Welcome to the fourth edition of Front Running, the prediction markets newsletter from Eilers & Krejcik Gaming.
The following data and insight comes from our new Predictions Markets Intelligence vertical. For subscription options and sample reports, contact Simon Krejcik at skrejcik@ekgamingllc.com.
1. QUOTE OF THE WEEK: DRAFTKINGS REFUSES TO RULE OUT STOCK TRADING
Appearing on the After Earnings show this week, DraftKings CFO Alan Ellingson was asked this week whether the company would ever expand to stock trading.
His answer, above, suggested it was being considered.
Ellingson hinted stocks would fit neatly into DraftKings’s existing relationship with its customers.
He said: “We do view ourselves as a for-money entertainment company, whether thats $2 on a lottery ticket, or P2P fantasy, there’s something thematic about how we engage with our customers. Right now we’ll stick with our wheelhouse and see how it evolves.”
2. NEWS YOU MAY HAVE MISSED:
Illinois has moved to classify prediction markets as sports wagering and tax them appropriately, under its new budget filed this week.
The state will tax 1.75% of each exchange wager up to 5mm wagers during a fiscal year; and 3.5% of each exchange wager thereafter.
Kentucky was the first state to try and directly tax PM revenues.
3. CHART OF THE WEEK: CENTRAL AMERICAN COUNTRIES OVERINDEX IN EARLY WORLD CUP TRADING ON KALSHI
The chart above shows the most popular teams by contract volume (CV) on Kalshi in individual game-markets (rather than outrights), per our tracking.
The early numbers seem to point to a Central American bias, with Mexico more popular than the U.S., and with two Caribbean nations (Curacao and Haiti) also in the top five most traded teams.
That bias may reflect the demographic makeup of key PM states like Texas and California.
With one week until kickoff, the match markets are still a fraction of the size of the outright market. The most popular game is the opener, Mexico vs. South Africa, which has done around $160k in CV while the tournament winner markets have done around $65mm in contract volume.
Contract volume is pumped up by the generally long odds for outright winner bets, with execution volume (EV) at $4.6mm, a closer reflection of OSB-style handle.
EV reflects the value transacted at the time of trade and is measured on a one-sided (i.e., yes-taker) basis.