By Paul R. La Monica
If you're looking for a Cinderella story in this year's NCAA basketball tournament, the stocks of DraftKings and FanDuel owner Flutter Entertainment might be the biggest underdogs out there.
Shares of both companies have plunged in 2026: DraftKings has tumbled more than 30%, while Flutter has lost more than half its value. Talk about an air ball. Both companies were hit last month after giving outlooks that disappointed investors.
Neither company got a boost from the start of March Madness this past week, either: Flutter fell 3.3% and DraftKings slid 7.5%. The stocks are the Wall Street equivalent of bracket busters, the bad picks in your NCAA pool.
DraftKings and Flutter did not immediately respond to a request for comment.
Investors hoping for the stocks to rebound in the near term may need to keep waiting. Although Barron's recently noted that Flutter is starting to look attractive from a technical standpoint, Wall Street remains worried that both companies -- plus casino owners that operate sports books -- are facing intense competition from up-and-coming predictions markets, such as Kalshi and Polymarket.
To be sure, there are questions about whether binary events contracts should be regulated -- and taxed -- more like gambling. Betting is not legal nationwide either: it's up to individual states to decide. But predictions markets are currently allowed in all 50 states, since they are deemed to be financial exchanges as opposed to gambling companies. As such, both FanDuel and DraftKings have recently launched their own prediction markets.
Still, investors are nervous that the increased popularity of Polymarket and Kalshi is eating into sports betting companies' market share. (Polymarket has a partnership wtih Dow Jones, the publisher of Barron's.)
Analysts remain bullish on both stocks, for what it's worth. Wall Street's consensus price target for DraftKings is more than 50% above current levels, while Flutter's is 90% higher than where the stock closed on Friday.
DraftKings may still be a longshot bet: Shares trade at the lofty valuation of 75 times earnings estimates for this year. Flutter, on the other hand, is valued at only 14.5 times earnings forecasts. The company is more diversified globally: it also owns the Sky Betting & Gaming, Paddy Power, and Betfair brands.
Whether or not either stock is able to make a comeback may depend on how successful they are with their own prediction markets businesses. It used to be the case that DraftKings and FanDuel mainly faced competition from the online sports books of legacy casino companies, such as MGM Resorts, Caesars Entertainment, and PENN Entertainment.
But a wager on DraftKings and Flutter is now a much riskier proposition, due to the rise of Polymarket and Kalshi.
Write to Paul R. La Monica at paul.lamonica@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 21, 2026 15:22 ET (19:22 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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