DraftKings officials maintain that prediction markets have had a negligible impact on the platform’s sports betting bottom line. The company will also invest untold millions of dollars into its own prediction market.
- DraftKings is investing in its prediction market platform despite saying current competitors have had minimal impact on sportsbook revenue.
- CEO Jason Robins called prediction markets the company’s most exciting growth opportunity since 2018 and aims to lead what could become a $10-billion industry.
- The company lowered short-term revenue projections in part because of promotional investments in prediction markets, expecting no meaningful profits from that vertical this year.
This dichotomy underscores the reality facing DraftKings and all other regulated U.S. sports betting operators as prediction markets boom. After achieving in 2025 its first-ever profitable year by net revenue following billions of dollars in losses from building and promoting their sportsbooks over the past five years, DraftKings now sees increasing challenges from prediction market sports event contracts.
Though prediction markets such as Kalshi are generating a fraction of the books’ revenues, the industry – and stockholders in particular – are worrying they will grow their share. DraftKings' stock is down more than 50% over the past 12 months, including a roughly 15% single-day drop after the company’s 2026 revenue projections fell short of industry estimates.
CEO Jason Robins said during Friday’s earnings call he lowered this year’s projections to ensure DraftKings hit its financial targets. Part of that profit hit will come from investment in DraftKings Predictions as well as accompanying promotional spend as the company looks to secure an early mover advantage in prediction markets as it did with sports betting.
DraftKings also reaffirmed plans to match its sportsbooks’ success as a national revenue and handle leader. Its moves toward that goal will help shape the future battle for what is projected to soon be a $10-billion industry.
“Our goal is simple,” Robins said Friday, “we intend to lead the predictions category.”
Prediction market context
Robins acknowledged in his recent shareholder letter that prediction markets presented the “most exciting growth opportunity” the company had seen since the 2018 Supreme Court decision that permitted legal single-game sports betting outside Nevada.
After a blitz of promotions around the 2024 U.S. presidential election burst prediction markets into the national consciousness, major platforms launched sports event contracts in conjunction with the 2025 Super Bowl, the year’s most-wagered upon sporting event. Sports event contracts have been traded in all 50 states, and Kalshi, Polymarket, Crypto.com, and a host of other prominent companies have announced aggressive expansion plans.
DraftKings CEO Jason Robins said company's 2026 revenue, EBITDA projections that were below industry analysts' projections was to assure that $DKNG hit its marks this year; Robins said Friday he twice lowered the final projections to make them more conservative
— Ryan Butler (@ButlerBets) February 13, 2026
Within months, these platforms generated roughly 90% of their trading volume from sporting events. Federally regulated prediction markets are also free of complex state-by-state sports betting regulations as well as governments becoming increasingly comfortable with raising sportsbooks’ taxes.
While maintaining they faced little threat from prediction markets, which offered a handful of contracts on sporting event compared to the thousands of bets available with the sportsbooks, leading operators including DraftKings, FanDuel, and Fanatics announced launch plans of their own. The three U.S. sports betting market share leaders by handle went live with their respective prediction markets in December of last year.
Kalshi and other prediction markets are facing lawsuits in more than a half-dozen states from gaming regulators arguing sports event contracts are an unregulated form of sports betting. With a final ruling, likely by the Supreme Court, still potentially years away, DraftKings and its competitors have felt compelled to enter the prediction market fray.
To comply with state regulations, DraftKings only launched in the roughly two-dozen states it didn’t offer its sportsbook, another potential disadvantage over the platforms with legal sportsbooks.
This pressure to ramp up a competitive platform is set to speed up after recently appointed CFTC chair Michael Selig said he would defend prediction markets and federal regulatory policy against state-level lawsuits. Robins praised the decision Friday, saying it helped clear up regulatory uncertainty.
Enjoying Covers content? Add us as a preferred source on your Google account“We're more excited, and I wouldn't say it's a change of tone as much as an acceleration of our excitement,” Robins said.
DraftKings' next steps
Friday’s earnings report removed all uncertainty about DraftKings’ prediction market ambitions. Shareholders are now waiting on the company’s execution.
DraftKings, alongside FanDuel, attributed their sports betting market share success to their multibillion-dollar investments in their technology platforms as well as marketing spend. Robins maintained those will be pillars of their prediction market approach.
Robins said the platform is already “improving rapidly” since the December launch. This will be accelerated by further integrations with Crypto.com as well as Railbird, the trading platform it acquired last year.
Unlike sportsbooks where bets go against the house, prediction markets are dependent on liquidity between buyers and sellers. Robins said the early deals, plus the existing DraftKings platform, gives it a clear advantage.
These tech and liquidity requirements must extend to “combo” contracts, prediction market’s version of parlays. The two sports betting market leaders’ financial success can be directly attributed to their first-mover advantage on single-game parlays, which allow bettors to stack an increasing number of smaller sports bets into combined wagers that grow more profitable for the books with each leg.
Kalshi and Draftkings have the same valuation now. https://t.co/m8GfbS6s4C
— Jack Raines (@Jack_Raines) February 12, 2026
Promotional spend for DraftKings Predictions will be in the tens of millions of dollars, but far beneath the billions spent in the prior five years for sports betting, Robins said Friday. The company expects flexibility with marketing spend between its sports betting, iGaming, and prediction market platforms, DraftKings officials reaffirmed Friday.
It remains to be seen how this impacts DraftKings' sportsbook, which years ago replaced its pioneering daily fantasy sports offering as the company’s flagship product. Despite a secure spot among the top two operators by handle along with record earnings, sports betting has become a relative afterthought, at least in the minds of industry investors.
Though Kalshi and other prediction markets are taking negligible market share, per current estimates, DraftKings’ actions (and the stock markets’ reaction) are more indicative of the industry’s future. Despite DraftKings’ established success, its recent stock decline combined with recent Kalshi investment has the companies' valuation worth roughly equal in the market’s eyes.
Robins and his colleagues aren’t projecting any positive contributions from prediction markets this calendar year, part of why the company’s 2026 revenue projections were below analysts’ predictions. But he believes prediction markets will soon be a $10-billion industry and that DraftKings can generate a significant share of it.
To do so, the company will follow a similar capital-heavy, tech and promotional-focused playbook that led it to become a daily fantasy, sports betting, and online casino gaming market leader, Robins said.
“Predictions is the next chapter of the same strategy.”
