Traders have made $2.3 billion by short selling these gambling giants

Hedge funds and other traders have collectively made $2.3 billion from short-selling the stocks of top US and European online gambling companies in 2026. Their profit breakdown includes earning $2 billion, $351 million, and $35 million by betting against Flutter, DraftKings, and Entain, respectively. Sign up at DraftKings Casino through this link, then bet $5+ to get 1,000 bonus spins:

Short sellers can create downward pressure on stocks that are already overvalued. This appears to be what recently happened with some of the world's biggest gambling companies, which are already facing challenges from prediction markets and rising US taxes.

Certain hedge funds correctly identified Entain, Flutter, and DraftKings as three of the most overvalued in the industry. Here's what has happened with each operator's share price so far in 2026:

US customers of these brands may not have noticed much difference so far. After all, players are still using the DraftKings and FanDuel Casino promo code in great numbers. However, it's clear that the stock market—notably short sellers—don't believe in these companies' big valuations right now.

The recent stock crashes of notable online gambling operators haven't come out of nowhere. Citi analysts, for example, recently downgraded Flutter from a "buy" to a "sell," citing concerns that the company won't be able to reach its US profit goals.

One reason why Flutter and its competitors are struggling is because of prediction markets. Considered derivatives by the Commodity Futures Trading Commission (CFTC), prediction operators are legal on a federal level and don't have to obtain state licensing. They're now attracting billions of dollars in bets every month, making them serious competition for state-regulated gambling sites.

Entain, which concentrates on European markets, may not be dealing with the US prediction market craze. But it has its own struggles resulting from rising taxes. For example, British Chancellor of the Exchequer Rachel Reeves successfully pushed for tax increases on UK betting and online casino games for real money last November.

US sports betting doesn't offer the same massive growth to online gambling giants as it once did. The activity is legal in 30 states, including many of the larger jurisdictions, like Florida, New York, Illinois, Pennsylvania, and Ohio.

However, the US-facing Flutter and offers like the DraftKings Casino promo code, are growing on the iGaming side. 

The best mobile casinos are still relatively new to Americans. As online gaming expands across America, the companies offering strong promotions should see the benefits.

The only issue is that US iGaming regulation is moving at a snail's pace. After the recent legalization of Maine online casinos, there's no clear candidate for which state will be the ninth to regulate iCasinos. That said, the biggest online gambling companies may need iGaming legalization to happen much faster in order to increase profitability.

Bettors must be 21 years or older and otherwise eligible to register and place wagers at online casinos. If you or someone you know has a gambling problem, please seek assistance from trained professionals such as the Problem Gambling Help Network at 1-800-MY-RESET.

This post is for informational purposes only and is not investment advice. 

Jeremy Olson