DraftKings Launching Sports Prediction Markets By End of 2025

DraftKings’ entry into prediction markets dominated its Q3 2025 earnings update, as CEO Jason Robins confirmed that the company is launching DraftKings Predictions. Robins said the federally regulated platform will also offer sports event contracts.

Robins ‘Bullish’ as DraftKings Bets Big on Prediction Markets

Notably, Robins began the business update letter saying, “This is the most bullish I have ever felt about the future of DraftKings.”

He called the move into prediction markets “a significant incremental opportunity” to help the company expand its audience reach.

“Nearly half the country’s population remains without access to legal online sports betting, but there are several other companies offering federally regulated Predictions in all 50 states,” he wrote. “As growth in Predictions continues, this may also motivate more states to legalize online sports betting and iGaming with reasonable regulation and taxation.”

The new platform, expected to be launched “in the coming months, pending licensure,” will initially target states without a DraftKings Sportsbook. There, according to Robins, “the vast majority of the financial opportunity exists.”

DraftKings has updated its fiscal 2025 guidance to include DraftKings Predictions. That confirms that it expects to launch the new product before the end of the year.

Robins sees the launch as additive rather than cannibalistic. “By comparison, Predictions is structurally limited, lacking the depth and breadth of a sports betting offering,” the CEO said. “In actuality, we see Predictions as a significant incremental opportunity.”

He added a competitive note that captured the company’s stance:

“We will pursue this opportunity, we will compete, and we will win.”

Rising Pressure From Prediction Markets

The announcement follows a wave of investor anxiety over the rapid ascent of federally regulated platforms, such as Kalshi, and the potential erosion of growth for state-licensed operators.

That concern has already rippled through gaming stocks. Days before the earnings release, Bank of America downgraded DraftKings and Flutter. It cited “mounting risks to the industry’s structural margins and long-term growth narrative.” The downgrade and subsequent stock decline followed previous share slides due to factors such as Kalshi’s international expansion.

DraftKings has been preparing to enter the prediction market segment. After months of rumors, in October, the company acquired Railbird, a platform certified by the Commodity Futures Trading Commission (CFTC). At the time, there was no mention of sports prediction contracts, which the earnings update now confirms.

Robins has indicated for months that the company was eyeing the segment. In the Q2 letter to shareholders, he wrote: “We continue to monitor events surrounding federally-regulated Prediction Markets and are actively exploring ways to enhance shareholder value through this opportunity.”

ESPN & NBCUniversal Partnerships Broaden Reach

While the entry of prediction markets highlighted the earnings release, DraftKings also announced exclusive marketing agreements with ESPN and NBCUniversal. They will provide the company with what it described as “unmatched NBA access,” which appeared in 73 percent of national broadcasts.

The ESPN agreement came just hours after the sports media company and PENN Entertainment announced that they’re parting ways. DraftKings stated that the ESPN integration will include enhanced responsible gaming messaging across both live and digital platforms.

Robins called the partnerships proof that the company is “increasingly advantaged through new exclusive marketing agreements … as well as our leading product offerings continuing to improve.”

Product Innovation Continues

The earnings presentation showcased several updates to DraftKings’ sportsbook and iGaming ecosystem:

• “Ghost Leg”, a mechanic that “eases the frustration of missing a parlay by just one leg,” has “saved over half a million parlays.”
• “Early Exit”, a feature that refunds bettors when a player leaves injured in the beginning stages of a competition.
• Community features, such as the “NBA King of the Court” leaderboard, helped increase DraftKings’ Discord membership tenfold year-over-year.
• A Spanish-language sportsbook interface is set to launch ahead of the 2026 World Cup.

Those improvements build on the operator’s surge in live-betting activity reported last quarter.

Q3 Results Show Growth Amid Volatility

Those strategic highlights arrived against a backdrop of steady operational growth but a more cautious financial outlook.

The company reported a net loss of $257 million in the third quarter, an improvement from the $294 million loss it reported in the same quarter a year earlier. Revenue was $1.14 billion, an increase of 4.4% year-over-year. The growth was primarily driven by a 25% increase in iGaming and an expansion of parlay engagement.

Robins noted that retention among NFL Week 1 bettors increased “over 300 basis points” year-over-year. Meanwhile, the NFL handle rose 13% and the NBA handle rose 19% season-to-date. The October handle increased by another 17% year-over-year. Still, short-term “customer-friendly” outcomes in NFL games reduced margins.

The company has adjusted its full-year guidance to $5.9 billion to $6.1 billion in revenue. That is down from $6.2 billion— $6.4 billion after the second quarter. For Adjusted EBITDA, the reduction was significantly higher: from $800 million–$900 million to $450 million–$550 million.

Share Buyback & Broader Strategy

DraftKings’ board has doubled its share-repurchase authorization to $2 billion, citing growing free cash flow generation. Robins said the company plans to remain “active with share repurchases over the next quarter.”

He reiterated that DraftKings’ broader edge lies in its scale: “Our capabilities are superior when it comes to customer acquisition, product development, regulatory compliance, responsible engagement, and the many other critical factors it will take to win in the space.”