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Prediction Markets Gain Wall Street Traction, Pressuring DraftKings

Institutional trading firms are rapidly adopting prediction market platforms. This intensifies competition in the event-betting space and draws scrutiny on DraftKings Inc.'s growth prospects.

Virtu Financial and Clear Street have joined Kalshi Inc. as market participants, signaling mainstream adoption of prediction markets by sophisticated traders and hedge fund brokers. These institutional participants represent a broader shift toward event-based wagering platforms.

The migration fragments DraftKings' market dominance in sports betting and prediction products. According to Wall Street's only bear on the company, competitive pressure from emerging platforms including Polymarket poses a key risk to DraftKings' expansion trajectory.

Prediction markets are transitioning from niche retail products to institutional trading venues, reshaping the competitive landscape for established sports-betting operators.