DraftKings shares fell 24% to $17.85 after the company missed third-quarter estimates and cut its 2026 outlook. It now expects adjusted EBITDA of $175 million to $275 million, down from $700 million to $900 million. Adjusted EPS was -$0.53, against an expected -$0.19. Revenue of $1.33 billion grew 16.2% but missed the $1.40 billion estimate. The cut follows heavier spending on DraftKings Predictions, an event-contract product. Predictions investment for 2026 is now $650 million to $700 million. Roundhill's Sports Betting & iGaming ETF (BETZ) fell about 5%. DraftKings, Flutter and Penn make up about 18% of the fund. Broad index funds barely felt the drop.

DraftKings cuts 2026 earnings forecast by up to $625 million as quarterly losses nearly double. DraftKings has lowered its full-year 2026 adjusted EBITDA forecast by as much as $625 million as investment in its prediction markets business weighs on profitability, despite a 16% increase in third-quarter revenue. The company now expects adjusted EBITDA of $175 million to $275 million, compared with its previous forecast of $700 million to $900 million. Revenue guidance was also reduced to $6.35 billion to $6.55 billion from $6.5 billion to $6.9 billion. The revised outlook follows a third quarter in which DraftKings reported a net loss of $468.7 million, compared with $256.8 million a year earlier, as higher operating expenses offset revenue growth. For the nine months ended September 30, the company's net loss reached $515.3 million, nearly three times the $132.7 million recorded in the corresponding period of 2025. Revenue increased 9% to $4.42 billion, but operating losses widened from $167.6 million to $555.5 million. Pre-tax losses for the nine-month period rose to $527.6 million from $140 million, while adjusted EBITDA shifted to a loss of $34.4 million from a positive $276.8 million a year earlier. DraftKings attributed much of its reduced annual earnings outlook to planned investment of $650 million to $700 million in its Predictions business, which allows customers to trade event contracts. Additional iGaming investment and customer-friendly sporting results also affected the forecast. The company expects Predictions to contribute minimal reported revenue in 2026, with customer promotions offsetting most of the gross revenue generated. Adjusted EBITDA investment in the business is projected at $175 million to $225 million during the fourth quarter alone. Meanwhile, DraftKings expects its core sportsbook and iGaming operations to generate adjusted EBITDA of $875 million to $925 million for the full year. The expansion comes amid growing competition in prediction markets, where DraftKings and FanDuel have introduced products targeting customers in states without traditional sports betting. Both companies face competition from established prediction market platforms, including Kalshi and Polymarket. Despite the near-term earnings impact, DraftKings expects Predictions to generate revenue of $650 million to $750 million in 2027, contributing to a companywide revenue forecast of $7.35 billion to $7.75 billion. The midpoint represents approximately 17% growth, while the upper end is 18.3% above the upper end of the revised 2026 forecast. Core business revenue is projected at $6.7 billion to $7 billion next year, with adjusted EBITDA of $1.15 billion to $1.25 billion. Further Predictions investment of $250 million to $350 million is expected to bring consolidated adjusted EBITDA to between $800 million and $1 billion. DraftKings CFO Alan Ellingson "Our core business continues to generate significant free cash flow, which we are deploying to fund growth in our Predictions business at attractive payback periods," DraftKings CFO Alan Ellingson said. In the third quarter, sports revenue, including betting and prediction markets, increased 32% to $783.6 million, supported by a 22% rise in sports consumer volume to $13.9 billion. Sports net revenue margin improved from 5.2% to 5.6%. iGaming revenue rose 2% to $460.9 million, while other activities contributed $84.5 million, bringing total quarterly revenue to $1.33 billion. Monthly unique payers increased 13% to 4.1 million, while average revenue per monthly unique payer rose 3% to $109. However, sales and marketing expenditure surged 68% to $605.7 million, while revenue costs increased 15% to $900 million. Product and technology expenses, along with general and administrative costs, also increased. Consequently, the quarterly operating loss widened to $493.1 million from $271.9 million, while the pre-tax loss rose to $478.7 million from $270.5 million. A $7.3 million tax benefit and a $17.3 million loss from equity method investments contributed to the final net result. Adjusted EBITDA losses increased to $316.9 million from $126.5 million. DraftKings founder and CEO Jason Robins DraftKings founder and CEO Jason Robins said customer engagement with Predictions had exceeded 1.6 million during the year. "The third quarter marked a pivotal moment for DraftKings, as the Predictions offering we have been building is now powering meaningful growth for our business," said DraftKings founder and CEO Jason Robins. "More than 1.6 million customers have engaged with Predictions year-to-date. Combined with the strength of our core, we believe we are set up for an exceptional 2027."

DraftKings' prediction-market ranking is not entirely 'clear' November 6, 2026 12:26pm DraftKings trimmed its revenue guidance for the rest of 2026 in its third-quarter earnings report released Thursday afternoon, causing its stock to fall by about 28% to $16.91 per share in the first two hours after the market opened Friday morning. Its new fiscal year 2026 revenue guidance range is $6.35 billion to $6.55 billion, down from a previous estimate of $6.5 billion to $6.9 billion. The company also projected $7.35 billion to $7.75 billion in revenue next year, slightly worse than analyst expectations. DraftKings, best known for its traditional sportsbook and online casino games, said it's making progress building a competitive prediction market product, as competitors Kalshi and Polymarket continue to soar. The Jason Robins-led company said in a press release and earnings presentation it now owns the "clear" third-place prediction market exchange in the U.S. But the pecking order depends on which measurement is being used. DraftKings' statement refers to notional volume, the prediction market industry's often misunderstood default metric. By notional volume, DraftKings has indeed improved from a U.S. market share of about 0.01% during the World Cup to near 3.6% in October, which is good enough to rank No. 3 among CFTC-regulated exchanges by a full percentage point. Yet elsewhere in its third-quarter earnings presentation, DraftKings disclosed that in October, retail users on DKeX accounted for just $840 million of the exchange's roughly $4.7 billion in notional volume (or about 18%). The company did not report how much volume its prediction market app is brokering for third-party exchanges, which wouldn't be reflected in DKeX's notional volume numbers. This fits with what Sportico has reported in prior data analyses: Contrary to how operators track performance for other forms of betting like traditional sportsbooks, prediction market notional volume does not come close to representing the amount of money retail users are risking. The metric assigns a flat $1 value to every prediction market contract purchased, regardless of how much of that $1 was wagered by an in-app retail user compared with an institutional market maker on the other side (DraftKings does not allow retail users to place limit orders). For example, DraftKings can tally both a $0.60 bet on a favorite and a $0.01 wager on a long shot as $1 in notional volume. More than half of DraftKings' prediction market notional volume comes from long-shot parlays, whereas on the opposite end of the spectrum, none of Robinhood-affiliated Rothera's volume comes from parlays. This underlines why notional volume is an imprecise reference point for comparisons between entities. DraftKings' notional volume also incorporates activity from its own affiliated market maker, essentially using its own spending to help make the case it is surging past competitors. Some exchanges do not use affiliated market makers. When measuring the actual dollars risked on prediction markets, DraftKings' prediction market exchange ranked No. 5 in October below Kalshi, Polymarket U.S., Novig and OG Prediction Markets, according to Aldrin Research. Three months ago, Robins said DraftKings could "win" prediction markets "this NFL season and beyond." When reached for comment, a DraftKings spokesperson emphasized the exchange is still in its early growth stage and said the company is well-positioned to handle any direction the prediction market industry goes, whether it's permanently being able to offer sports bets or losing those types of wagers in a U.S. Supreme Court decision.