A short seller report published Thursday by The Bear Cave asserts that DraftKings (NASDAQ:DKNG) is under growing competitive strain from prediction market platform Kalshi. The note, titled "Even More Problems at DraftKings," highlights what the author characterizes as Kalshi’s accelerating user adoption and product breadth.
The Bear Cave points out that DraftKings shares have declined by roughly 36% since the short seller’s initial piece on the company in September 2025. The new report focuses on Kalshi as a specific competitive threat, saying the platform’s expansion has been driven by advertising, media coverage, social-media-driven viral moments and what the author calls "superior depth, breadth, and distribution compared to traditional online sportsbooks."
To support its view, the report references third-party tracking and platform data. Dune-tracked metrics are cited as showing significant volume growth on Kalshi. The report emphasizes the platform’s depth through examples from its order books, noting that the Super Bowl winner market can reportedly accept more than $5 million in bets on either side without causing price movement.
Kalshi’s product mix is described as broader than typical sportsbook offerings. The platform offers conventional betting instruments such as point spreads, over/under totals, player touchdown markets and custom parlays, while also listing novelty markets tied to Super Bowl announcers, advertisers, attendees and halftime show performers - market types the report says are generally unavailable on DraftKings.
Distribution expansion is also highlighted. Since January 16, Kalshi has been accessible through Robinhood, which the short seller frames as an important channel extension. App-download analytics from Apptopia are cited to demonstrate growing overlap between apps: a February 3 analysis found that about 10% of DraftKings Sportsbook app users were also using Kalshi in January. The note further states that cross-app overlap between Kalshi and major sportsbooks has increased almost every month since August.
The Bear Cave concludes that the competitive pressure from Kalshi will become "painfully obvious to DraftKings investors in the coming months." The report situates Kalshi’s combination of marketing reach, novel market types, order-book depth and platform distribution as the core elements underpinning that view.
Key takeaways
- DraftKings stock has fallen about 36% since The Bear Cave’s first article on the company in September 2025.
- Kalshi is reported to show significant volume growth and deep order books, with the Super Bowl winner market able to accept $5 million+ bets on either side without moving prices.
- App-download data indicate increasing user overlap: roughly 10% of DraftKings Sportsbook app users were also on Kalshi in January, and cross-app overlap has risen nearly every month since August.
- Online sports betting and prediction markets
- Consumer-facing apps and digital distribution channels
- Competitive dynamics: The Bear Cave contends Kalshi’s product depth and distribution pose a rising threat to DraftKings’ sportsbook business - an outcome the report says could become more evident to investors in the coming months.
- User overlap trends: Apptopia data showing roughly 10% cross-usage of DraftKings and Kalshi in January and month-over-month growth in overlap since August introduce uncertainty around customer retention and share of wallet for major sportsbooks.
- Data limitations: The report relies on third-party tracking and platform-specific order-book snapshots to characterize Kalshi’s depth and growth; those data points are presented as evidence but reflect the metrics and timeframe cited by the short seller.