{ "docId": "019dd923-622c-750b-8b99-c6da1f4c0f8e", "docSlug": "fab8b03c0201", "documentTitle": "DraftKings Inc. (DKNG)", "authorId": "54_Spruce_Point_Capital", "authorName": "Spruce Point Capital Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2025-10-03 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 8, "pageCount": 48, "prevPage": 7, "nextPage": 9, "slideType": "executive_summary", "function": "summarize", "density": "dense", "nDataPoints": 4, "notes": "The slide discusses legal injunction tests (irreparable harm, public interest) and regulatory warnings from state gaming commissions.", "elementsJson": [ "headline_text", "paragraph" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b99-c6da1f4c0f8e/8", "deckHref": "/decks/019dd923-622c-750b-8b99-c6da1f4c0f8e", "deckJsonHref": "/decks/019dd923-622c-750b-8b99-c6da1f4c0f8e.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-c6da1f4c0f8e#slide-8", "components": [ { "bbox": null, "kind": "callout", "text": "We Believe Prediction Markets Are Unlikely To Expand TAM For OSBs In The Near Future", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-78b7-702e-962a-3d56c2f80c8b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.35, "w": 0.96, "x": 0.02, "y": 0.62 }, "kind": "paragraph", "text": "Our debate is not about what ultimately happens with sports prediction exchanges in the next year or two and who wins/loses the litigation. Our position is we do not believe DKNG or any other OSB operator would risk their gaming licenses by launching sports prediction exchanges in the next 3-6 months or in the next year or two while the CFTC and the states are potentially embroiled in further litigation or a pending SCOTUS decision. Flutter/FanDuel's partnership with CME was very clear to exclude sports. Even if DKNG decides to launch a sports prediction exchange on their own or acquire Railbird, our research indicates it could take 6-18 months for final CFTC approval and launch. With DKNG and the other OSB operators on the sidelines, Kalshi, Polymarket and others can continue to take market share. Individuals in CA, TX, GA, and the other 21 states where DKNG does not operate likely have never heard of Kalshi, Polymarket, etc. as most may assume all betting is prohibited. We believe the individuals who do know the prediction exchanges are those already in online sportsbook states, familiar with betting platforms, and often active across multiple operators to chase promotions or better odds. We do acknowledge Kalshi's partnership with Webull and Robinhood which has 26.5 million funded accounts across the U.S. Spruce Point also believes the impact to DKNG could be more severe given in 2024, 61% of its revenue came from its U.S. sportsbook vs. only 29% for Flutter.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "065967c2-7afd-44ad-a227-21763d229649", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.96, "x": 0.02, "y": 0.39 }, "kind": "paragraph", "text": "We believe DKNG and the other OSB operators are stuck between a rock and a hard place. From our understanding, the Ohio Casino Control Commission is one of the more prominent gaming regulators across the country. The commission has warned licensed sportsbooks in the state that offering or associating with prediction exchanges could put their licenses at risk. We also believe that Flutter appeared before the Nevada gaming commission where they addressed questions regarding a potential arrangement with Kalshi. Finally, we believe the nail in the coffin on this topic is the fact that the Arizona Department of Gaming recently warned OSBs that offering prediction markets inside or outside of AZ may jeopardize their licenses.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "97b2a21d-f399-4b3b-acb8-2231ef618701", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.96, "x": 0.02, "y": 0.17 }, "kind": "paragraph", "text": "It is very important to note, when considering injunctions, federal judges are required to apply two key tests: irreparable harm and public interest. We believe Kalshi's sportsbook-level handle on its exchange speaks directly to both.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e8c276a6-06a9-4ae3-bc7a-60ec00ab2c10", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.75, "x": 0.02, "y": 0.34 }, "kind": "title", "text": "We Believe Prediction Markets Are Unlikely To Expand TAM For OSBs In The Near Future", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "82bac037-02f0-4fdc-93ca-3412f366a8aa", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.38, "x": 0.31, "y": 0.05 }, "kind": "title", "text": "Executive Summary", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "cda35612-25a4-4acd-afef-bc7c208cfaae", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 20, "from": 6, "beatId": "4e1c17fc-d0a4-422f-b00f-a3e72a45a04a", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Struggle", "beatSlug": "overcoming-monster-the-struggle", "evidence": "Detailed analysis of Kalshi's advantages and DKNG's challenges", "position": 1, "confidence": 0.8, "parentBeatName": "Development", "parentBeatSlug": "development" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }