$DKNG

DraftKings faces a proposed class action lawsuit alleging it used AI to target customers likely to lose more money with promotions. The plaintiff claims the company's 'elasticity score' model violated privacy notices and Massachusetts regulations. DraftKings denies the allegations and plans to defend the case vigorously. The Massachusetts Gaming Commission is reviewing AI use by sportsbooks but has not found wrongdoing by DraftKings.

DraftKings (DKNG) shares fell 3.0% to $19.15. GF Value™ estimates a 63.4% upside to $52.35, but warns of potential risks due to unprofitability. Insiders have net sold $19.3M in the past year. The GF Score™ is 69/100, with strong growth but weak valuation and financial strength.

Sen. Richard Blumenthal (D., Conn.) is expanding an inquiry into VIP betting programs, targeting FanDuel, DraftKings, and prediction-market platforms like Kalshi and Polymarket. The probe follows concerns over FanDuel's use of personalized athlete videos for high-stakes bettors, including one sent to a gambler in debt. FanDuel claims it prioritizes responsible gaming but has not provided specific details. Blumenthal seeks more transparency on safeguards and athlete involvement.

Sen. Richard Blumenthal is seeking details from DraftKings and prediction markets like Kalshi and Polymarket about their VIP programs, following scrutiny of FanDuel's similar program. FanDuel has been criticized for not adequately addressing questions about athlete involvement and safeguards for problem gamblers. Blumenthal plans to ask DraftKings and prediction markets the same questions, citing concerns about regulation and responsible gambling.

ARK Invest, led by Cathie Wood, reduced its holdings in SpaceX, Robinhood, and DraftKings, while increasing investments in defense and air taxi stocks like Archer Aviation and Joby. Shares of SpaceX, DraftKings, and Robinhood declined early Wednesday. ARK sold 54,873 shares of SpaceX stock.

DraftKings (DKNG) stock rose 5% after Bank of America upgraded it to Buy, citing a 45% upside to $27. The analyst sees fading concerns and predicts $400M-$600M in prediction market fees by 2027. Q2 EBITDA was $115M, with full-year guidance at $6.5B-$6.9B revenue. BofA lowered 2026 EBITDA but raised 2027 estimates.

Guggenheim kept a Buy rating on DraftKings with a $30 price target, suggesting a 51.9% upside from the Oct 6 close. The firm cites DraftKings' strong market position in North American online sports betting and iGaming, robust user engagement, and long-term revenue potential of $13B-$16B.

Guggenheim reduced DraftKings' (DKNG) price target to $30 from $33, citing higher investment in Prediction Market. The stock trades near its 52-week low. Guggenheim adjusted its EBITDA outlook to $622M, below management's guidance. Analysts remain divided, with some upgrading ratings and others lowering targets due to increased spending.

DraftKings and FanDuel each contributed $3.5 million to Nebraska's sports betting legalization campaign, totaling $7 million. Nebraska voters will decide on Nov. 3 whether to allow online sports betting, which supporters say could generate $86.9 million in tax revenue over five years, with $60.9 million earmarked for property tax relief. DraftKings and FanDuel are the largest backers, with total campaign funding exceeding $14.5 million.

DraftKings has asked a federal judge to dismiss part of a patent infringement lawsuit filed by Cantor Fitzgerald's InterActive Games unit. The suit, filed in April, alleges infringement of five patents, including one co-invented by Howard Lutnick. Judge William G. Young is reviewing the patents before making a decision.