DraftKings could be a strong rebound candidate.

DraftKings ( DKNG -7.13% ) has been on the losing side of the market lately, sliding by nearly 40% from the 52-week peak it reached in early 2025. The drop hasn't been about poor execution or slowing demand, but instead, the rise of sports-related prediction markets.

Online gaming companies like DraftKings are highly regulated at the state level. The business model is quite simple: Such companies take a piece of the action on every bet placed across their digital platforms.

DraftKings generates revenue in three main areas: regulated sports betting, its long-running daily fantasy sports contests, and its growing online casino unit. Sports betting is its biggest business, and same-day parlays have been a big growth driver for the comp

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