DKNG Stock Slips Overnight: Jim Cramer Sounds Alarm On DraftKings And Gambling Stocks – ‘I Think You’re Right To Be Concerned’

• Jim Cramer warned that fierce competition makes gambling stocks risky. 
• The U.S. online gambling market is expected to reach $22.8 billion by 2034. 
• DraftKings cut its revenue and adjusted EBITDA outlook to $700 million in its prediction markets business. 

DraftKings Inc. (DKNG) stock slipped overnight after “Mad Money” host Jim Cramer issued a warning on gambling stocks, citing intensifying competition across the industry. Cramer said he could no longer recommend gambling stocks, calling them “one big gamble” and telling investors, “I think you’re right to be concerned.” 

DraftKings stock inched 0.7% lower overnight Wednesday, after a 1.5% gain in regular session. 

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Competition Weighs On Gambling Industry, DraftKings 

Responding to concerns about the sector, Cramer acknowledged that the growing number of competitors could create challenges for gambling operators. 

“I think you’re right to be concerned. There’s too much competition. ... I no longer can recommend any of these gambling stocks because they’re one big gamble.” 

According to an IMARC report,  the U.S. online gambling market is expected to grow from $11.8 billion in 2025 to $22.8 billion by 2034, expanding at an annual rate of 7.33%. Growth is being driven by the legalization of sports betting in more states, widespread smartphone use and rising demand for mobile gambling apps. Sports betting accounts for the largest market share at 49.3%, while mobile devices make up 68.7%. 

However, the analysis report says operators face challenges from intense competition, high marketing costs, strict state regulations and responsible gambling requirements.

DKNG’s Prediction Markets Expansion Comes With Heavy Investment Costs

Last week, DraftKings slashed its full-year revenue outlook to $6.35 billion - $6.55 billion from its earlier estimate of $6.5 billion to $6.9 billion. It also cut its adjusted EBITDA outlook to $175 million to $275 million, compared with its previous guidance of $700 million to $900 million. 

The company expects to spend $650 million - $700 million on its prediction markets business, which has yet to bring meaningful revenue because customer promotions are offsetting most of its earnings. DraftKings plans to invest another $175 million - $225 million in the business during Q4.

The company is spending heavily to compete with prediction market platforms such as Kalshi and Polymarket. CEO Jason Robins said more than 1.6 million customers had used DraftKings' prediction markets offering this year.

DKNG Stock: Retail View 

On Stocktwits, retail sentiment around the stock remained ‘extremely bullish’. The stock recorded a 41% slump in message volume over the past week.  

A user said, “Pessimists out, optimists in. Good volume and green. Let's go dkng.”

Another user said, “With $DKNG now available in all 50 states I think this is way too cheap of a price. Could see it double from here”.

A third user said, “over sold. Made a killing on this after Covid and will again!”

DKNG stock has crashed 43% year-to-date. 

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