BofA sees Kalshi fee changes impacting Flutter stock, DraftKings

Investing.com - Prediction market volume rose 7% week-over-week to $10.0 billion, with Kalshi maintaining 87% market share followed by Polymarket at 8%, according to Bank of America. Rothera volume jumped 180%, Underdog climbed 144%, Kalshi gained 7%, Crypto.com added 1%, and Polymarket fell 3%.

Kalshi plans to add fees on parlay markets beginning August 19th. The platform previously did not charge maker fees on combo markets, which have accounted for 40% of total volume on Kalshi over the past month. Bank of America estimates the fee change could result in a $4 million EBITDA impact in the second half for FanDuel, relative to the company's $50 million revenue and EBITDA guidance for market making.

Kalshi rolled out a third-party geolocation verifier last week and geofenced Michigan and Nevada. A Washington state judge ordered Kalshi to stop offering sports event contract trading in the state by September 2nd. The CFTC exercised emergency authority ordering Kalshi to continue operating in New York despite rulings against the platform in that state.

The CFTC issued an advisory regarding incentive programs for event contract trading, warning against sweepstake-like or randomized reward programs and prizes based on pure chance. Federal authorities are investigating mention markets following insider trading accusations, prompting Kalshi to remove all mention markets on sports.

Kenneth Dart filed a form 13G on Friday showing 5.8% ownership of DraftKings (NASDAQ: DKNG). Dart owns over 30% of Evolution Gaming and is nearing 30% ownership of Flutter Entertainment (NYSE: FLUT). Dart has not disclosed any interest in strategic initiatives for Evolution Gaming or Flutter Entertainment despite building material stakes in both companies.

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