Shares of online betting platform DraftKings fell 10.62 percent over the last month. This is in stark contrast with the broader market, with the Consumer Discretionary sector down just 0.11 percent and the S&P 500 Index up 0.4 percent.

Significant insider stock selling in the year has retail investors in a fix, and did not help DraftKing’s shares. DraftKings’ shares fall coincide with hefty insider selling, including director Paul Liberman selling $20.4 million in stock in December. Whereas Chief legal officer R. Stanton Dodge sold 228,500 shares worth $9.77 million. 

Data from Marketbeat revealed that these decisions followed a year of continuous insider selling, with $205.54 million worth of stock being sold in 2024. Of this, insider selling has seen a downtrend, from $66 million in the first quarter to $34 million in the fourth.

Retail investors are cautious despite the slowing pace because none of the 20 insider transactions reported for DraftKings in 2024 were stock purchases. Additionally, the company’s annual return of 5.53 percent falls greatly behind the performances of its peers. DraftKings’ chief rival, Flutter Entertainment, for example, has seen its shares surge 44.39 percent in 2024.

Flutter’s insiders have refrained from selling shares in recent months, which shows a confidence that contrasts with DraftKings’ executives selling stakes. This adds to the disparity and shows different strategies of the two company’s management teams.

Analysts’ expectation for FY

The online betting platform is set to disclose its full year financials soon, with a forecast of earnings per share (EPS) at -$0.79, a 54.34 percent improvement from 2023. Analysts also expect a 33.95 percent year-on-year rise in revenue to $4.91 billion. 

While analyst’s projections indicate significant growth, they have still not ceased retail investors’ concerns about the company’s financial position and continued insider sell-offs.

In corporate news, New Jersey Division of Gaming Enforcement (DGE) levied a $20,000 fine on DraftKings for taking wagers on the outcome of Russian basketball matches over nine months in 2020 and 2021. In addition, the company also accepted wagers on unapproved table tennis matches.

The company did not meet regulatory requirements for certain pre-season National Football League (NFL) bets in 2022. Over $61,000 that was wagered on Russian basketball and $6,700 on the NFL has been voided and refunded to customers.

Apart from DraftKings, Rush Interactive and sports betting technology company Kambi faced a fine of $10,000 each for multiple errors. The penalties came as part of the broader enforcements by the DGE to ensure compliance in New Jersey’s growing sports betting market.

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