DraftKings Shares Dip After Jim Cramer Warns on Gambling Stocks

what happened

DraftKings (DKNG) shares fell 0.7% overnight, according to Stocktwits, after Jim Cramer, host of Mad Money, said he could no longer recommend gambling stocks. He cited rising competition across the industry and said he understood why investors were worried.

The pressure on the sector comes as IMARC projects the U.S. online gambling market to grow from $11.8 billion in 2025 to $22.8 billion by 2034, a 7.33% annual rate. The same report points to heavy marketing costs, strict state rules and intensifying competition as hurdles for operators.

DraftKings has had a rough week of its own. It lowered its full-year revenue forecast to $6.35–6.55 billion from $6.5–6.9 billion and cut adjusted EBITDA guidance to $175–275 million from $700–900 million. The company plans to spend $650–700 million on its prediction markets arm, which still earns little as promotions absorb most profit, with another $175–225 million in the fourth quarter.

why it matters

The mix of a guidance cut and rising spending raises questions about when DraftKings can return to profit. Rivals such as Kalshi and Polymarket are competing for the same users, and CEO Jason Robins said more than 1.6 million customers used the product this year. Retail traders on Stocktwits remain upbeat, even though message volume fell 41% over the week and the stock is down 43% year to date.

market impact

DKNG and gambling stocks: weaker guidance and higher spending weigh on shares

• ▼DraftKings shares pressure down — the lowered outlook and heavy prediction-market spending pressure the stock

tags

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