Key Points
- Six weeks before leaving as president, Matthew Kalish secured a $30 million, three-year marketing deal for his wholly owned company HardScope, which earns up to a 14% commission on every dollar it places for DraftKings.
- CEO Jason Robins controls roughly 88% of DraftKings’ voting power despite holding only around 2% of its economic interest, a structure Harvard Law’s Jesse Fried described as a “big red flag.”
- DraftKings posted a $67.6 million net loss in Q2 2026 while spending $322.5 million on sales and marketing, with short sellers placing an estimated $471 million in bets against the stock this year.
A $30 million marketing contract. An $18 million exit package. One man controlling 88% of the votes. And none of it was disclosed until months after it was already done.
The Deal That Was Already Signed When Investors Found Out
Kalish has worked on building up DraftKings from a startup in Boston to being one of the biggest sports wagering websites in America for a span of 14 years. After stepping down from the position of president in March 2026, the company he left behind had, unbeknownst to all but him, made commitments to pay out marketing fees worth as much as $30 million to a company that he personally owned.
The company is called HardScope. Kalish owns it entirely. It brokers promotional deals between DraftKings and podcast hosts and social media creators, collecting a commission of up to 14% on every dollar it places. Six weeks before his March 2026 exit, DraftKings signed a three-year agreement authorising payments to HardScope of up to $30 million.
How $600,000 Quietly Became $30 Million?
The arrangement did not appear fully formed. DraftKings and HardScope first agreed to a deal in June 2025 capped at $600,000 for promotional services, at a point when Kalish was still serving as president. He formally launched HardScope in December 2025, while still holding that executive role. By January 2026, the relationship had expanded into a new agreement authorising up to $30 million over three years. Kalish formally departed two months after that.
A DraftKings spokesperson told Fortune: “Fees are payable only when an applicable statement of work and related talent agreement are executed, and the applicable services and deliverables are provided.” Kalish added that DraftKings holds the right but not the obligation to use HardScope’s services, and that the 14% commission rate is more favourable than what the company has paid other marketing agencies. Both parties confirmed the arrangement was approved by DraftKings’ independent audit committee.
That audit committee approval is the company’s legal shield. It does not, however, answer a more basic question: if the deal is commercially sound and independently reviewed, why was it not disclosed at the time of signing rather than months later?
The Governance Structure That Made It Possible
Understanding how this arrangement moved through DraftKings’ board without wider scrutiny means understanding how the company is actually controlled. CEO and cofounder Jason Robins holds roughly 88% of DraftKings’ voting power through a dual-class share structure, despite his shares representing only around 2% of the company’s economic interest. That is an enormous gap between financial exposure and decision-making power.
Jesse Fried, a corporate governance expert at Harvard Law School, examined that structure and did not soften his assessment. “It looks like DraftKings created an arrangement where somebody with only a tiny amount of economic exposure to the company could control it,” he told Fortune. “It’s a very extreme governance arrangement that raises lots of problems.”
Fried labelled it a “big red flag.” And the reasoning is straightforward: when audit committee members are chosen by a board where all three cofounders, including Kalish, hold seats, and where a single person commands nearly nine out of every ten votes, the independence of any approval process becomes a structural question, not merely a procedural one.
An Exit Package Layered on Top
The HardScope contract was not the only financial benefit attached to Kalish’s departure. Separate from the marketing deal, DraftKings provided Kalish with an estimated $18 million in accelerated stock awards as part of his exit package. The company also agreed to cover his home security and COBRA health insurance costs through March 2027.
Taken together, a departing cofounder left with a multi-million-dollar compensation package and a multi-year, commission-generating marketing contract with the company he was leaving. Both were approved internally. Neither was disclosed to shareholders until well after the fact.
The Financial Context That Sharpens Every Question
DraftKings is not in a strong position currently. This firm’s stock price has decreased by 44% in the last year. DraftKings’ results for Q2 2026 were announced on 6 August 2026, reporting a net loss of $67.6 million compared to the net income of $157.9 million recorded during the same period of time last year. Its revenues were down by 5% to $1.44 billion. The accumulated deficit of the firm stands at around $6.48 billion.
What makes those figures particularly striking is the marketing line: DraftKings spent $322.5 million on sales and marketing in that single quarter alone. It spent that amount and still posted a significant loss. Against that backdrop, a $30 million, commission-based marketing commitment routed through a departing insider’s private firm is not easy to read as purely routine capital allocation.
Short sellers have noticed. According to data analytics firm S3 Partners, investors have placed an estimated $471 million in bets against DraftKings’ shares this year, with roughly $879 million worth of stock currently sold short, per Fortune’s reporting. That is a considerable weight of negative sentiment sitting on top of a governance story that will not disappear quietly.
Kalish Stays Loud While Staying Involved
Since departing as president, Kalish has not kept a low profile. He remains on DraftKings’ board and, within days of leaving his executive role, returned to social media for the first time in four years. His primary target has been Kalshi, the prediction market platform that DraftKings now competes with directly, having launched its own DraftKings Predictions app in December 2025.
Kalish told Front Office Sports that Kalshi is “extremely niche” and years away from developing a product that competes with traditional sportsbooks, citing a bet he placed on the PGA Championship where he received what he described as deeply unfavourable odds due to Kalshi’s reliance on professional market makers. His public campaign has been vocal and detailed. It has also come from someone who still holds a board seat at a direct competitor to the platform he is criticising.
Expert Analysis
We have followed DraftKings closely enough to say this: the HardScope deal, taken alone, might be defensible. Commission-based influencer marketing is legitimate, and a favourable rate is a reasonable business argument. What makes this arrangement difficult to accept at face value is the accumulation of details surrounding it.
A $600,000 contract signed while Kalish is still president scales to $30 million just before he leaves. An $18 million stock award accompanies his exit. The whole arrangement is disclosed only after it is already binding. And the governance structure that approved it concentrates nearly all voting authority in a single person with minimal financial skin in the game. Each of those facts is individually explainable. Stacked together, they describe a company where insiders are structurally positioned to do well even when shareholders are not.
The real test will come at the next earnings call. DraftKings spent over $322 million on marketing in one quarter and still reported a $67.6 million loss. If management cannot demonstrate that HardScope’s placements are held to the same return standards as every other vendor, the governance question becomes an investor confidence question. At a company where the stock has already lost nearly half its value in a year, that is a conversation DraftKings can ill afford to avoid.
Explore more:
Share
4 views
