Prediction markets like Polymarket are suddenly testing the limits of what regulators and big banks will tolerate, and that friction is spilling over into how investors think about regulated betting and online gambling stocks. This is where the upside and the risk can sit side by side. This article examines the Polymarket and JPMorgan fallout and highlights 3 US-listed operators that appear most exposed to the story playing out now.

The stocks in this article are just a starting sample, and the full screen surfaced 15 more US-listed regulated betting and online gambling companies with equally compelling narratives that are not covered here. To go deeper into this space, head straight to the US-listed regulated betting and online gambling operators screener to identify, filter, and analyze the operators that best fit your own highest conviction view.

DraftKings (DKNG)

DraftKings is a digital sports entertainment and gaming company that offers online and retail sports betting, daily fantasy sports, iGaming casino products, digital lottery couriers, prediction markets and more across the US and internationally. The business is heavily skewed to consumer-facing activity, with about US$6.2b in revenue coming from its Business-To-Consumer segment. The stock currently carries a market cap of about US$12.7b, which puts it firmly in mid to large cap territory for US-listed betting operators.

DraftKings sits right in the crosshairs of the Polymarket and JPMorgan story. As regulators and banks bear down on unregistered prediction platforms, a fully licensed operator with deep regulator relationships and an in-app Predictions product that already handles around US$11.3b in annualized volume is attracting fresh attention. The company is still reporting losses and relies on higher risk external borrowing, while insider selling and rich executive pay keep governance on the watch list. Analysts are highlighting that the company may be able to improve its earnings and move toward profitability within a few years, and management is openly positioning DraftKings for a broader Super App play tied to regulated prediction markets. If this shift from grey-market to onshore prediction trading accelerates, DraftKings could become more central to that story than its current valuation suggests.

DraftKings could be sitting on an underappreciated pivot as prediction trading moves onshore. At the same time, its losses, borrowing and insider moves raise hard questions. Get the full picture in the 3 key rewards and 1 important warning sign

Build your own prediction market shortlist

DraftKings and the two other stocks in this list all surfaced from a single Simply Wall St filter, but your best ideas will come from tailoring the process. Use our flexible Screener to blend metrics like valuation, growth, balance sheet strength and risks, or start with any of our curated Investing Ideas.

Rush Street Interactive (RSI)

Rush Street Interactive runs online casinos, sports betting and social gaming under the BetRivers, PlaySugarHouse and RushBet brands across the United States, Canada and Latin America. Its US$1.4b in revenue comes entirely from online gaming and retail sports betting, with a heavy tilt toward digital casino style products. The stock currently carries a market cap of about US$5.6b.

Rush Street Interactive gives you pure exposure to regulated online casino and sports betting at a time when regulators are tightening the screws on unlicensed prediction markets and crypto style betting platforms. Management has leaned into iCasino first, reported record revenue and adjusted EBITDA, and is expanding in markets like Latin America and Alberta. This heavier push into newer jurisdictions leaves the company more exposed to local tax changes and regulatory shocks. Analysts currently see meaningful upside based on both their price targets and cash flow modelling, yet the stock trades on a very high P/E, which means expectations are loaded and execution on growth and margins matters.

Rush Street Interactive’s high P/E and pure online exposure suggest that investors may be missing a key detail in the growth story. Get the full analyst forecasts for Rush Street Interactive and see what expectations might be hiding.

Flutter Entertainment (FLUT)

Flutter Entertainment runs one of the largest global portfolios of online sportsbooks and casinos, with brands like FanDuel, PokerStars and Paddy Power serving customers across the US, UK, Europe, Australia and beyond. The business is heavily skewed to its US segment, which generated about US$7.0b, followed by Southern Europe and Africa at roughly US$3.5b, the UK and Ireland segment at US$3.6b, Asia Pacific at about US$1.4b and additional contributions from Brazil and other regions. The stock currently carries a market cap of roughly US$17.0b.

Flutter Entertainment puts regulated prediction style products like FanDuel Predicts squarely inside an established betting and iGaming franchise at a time when unregistered platforms face CFTC scrutiny and even debanking from institutions like JPMorgan. Some observers point to the US focused investment, cost transformation program and analyst implied upside from discounted valuation as factors that are drawing attention, while the current losses, heavy external borrowing and rising tax and regulatory pressure mean the stock may still be considered a show me story for anyone using this screener as a hunting ground.

Flutter Entertainment’s US focus and cost reset could be masking a much bigger shift in how investors frame this stock. Before the story moves on, see how the analyst forecasts for Flutter Entertainment lines up with the regulatory and tax pressure that could change everything.

Seeking Alternatives Before Everyone Else

Fresh ideas do not stay under the radar for long. Stocks with real breakout potential can gain attention quickly once momentum starts building. Scan these curated shortlists while it matters and act now.

• Spot companies where strong cash flows back the story by scanning a curated 51 high quality undervalued stocks before the crowd prices in the quality.
• Track infrastructure plays that could hold pricing power by reviewing a focused 36 power grid technology and infrastructure stocks while they are still dropping clues in the financials.
• Follow the shift toward intelligent automation by filtering through hand picked 39 robotics and automation stocks before their momentum stories become fully mainstream.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.