Shares of DraftKings Inc (NASDAQ:DKNG) and Flutter Entertainment (NYSE:FLUT) are trading lower Tuesday after Robinhood Markets Inc (NASDAQ:HOOD) announced the launch of pro and college football prediction markets.
What Happened: Robinhood said it will offer football prediction markets through the prediction markets hub on the Robinhood app, allowing users to trade outcomes on all regular season pro matchups and all college Power 4 schools.
"Adding pro and college football to our prediction markets hub is a no-brainer for us as we aim to make Robinhood a one-stop shop for all your investing and trading needs,” said JB Mackenzie, VP & GM of Futures and International at Robinhood.
Robinhood said it already started rolling out the offerings. The company expects all eligible users to gain access to the new prediction markets in the coming days. Robinhood plans to add weekly matchups as the season progresses.
Shares of DraftKings and Fanduel parent Flutter Entertainment are facing selling pressure as the expanded offering from Robinhood could potentially eat into the companies’ market share of the football betting market.
Robinhood will now be able to offer comparable betting options to users as traditional sportsbooks while potentially sidestepping fees due to the peer-to-peer predictions markets model, which could result in higher payouts for users. As Robinhood continues to build an integrated platform with diversified offerings, the company poses a potential threat to companies like DraftKings and Flutter.
The increased competition from Robinhood appears to be weighing on shares on Tuesday. DraftKings stock was down 2.04% at $44.77 and Flutter shares were down 1.01% at $291.03 at the time of publication, according to Benzinga Pro.
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