Sports-betting app DraftKings is not on track to have as good a year as it once expected; the company trimmed its 2026 financial outlook amid the rise of competing prediction markets.
The company’s third-quarter earnings report released on November 5 showed projected full-year revenue of $6.35 billion to $6.55 billion, down from its previous estimates of $6.5 billion to $6.9 billion.
A day following the earnings report, DraftKings (Nasdaq: DKNG) saw its shares fall 23.6% to $17.9 at the time of publishing, reaching its lowest price in the last six months.
The stock is now down more than 49% year to date.
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DraftKings’s lower outlook reflects the sports-betting company’s increased investment in the prediction sector of its business, the company said, with around $650 million to $700 million invested.
These prediction investments will not have revenue reflected in this year’s figures, the report said, as “new customer promotions will offset the lion’s share of gross revenue generated.”
The significant investment comes as prediction markets like Kalshi and Polymarket continue to gain ground in the U.S., allowing for users to wager money on real-life events like political elections or a TV show’s finale.
In its 2027 outlook, DraftKings forecasts a range of $7.35 billion to $7.75 billion in revenue, and $800 million to $1 billion in earnings before interest, taxes, depreciation, and amortization.
The revenue forecast contrasts with analyst projections of $7.6 billion, per consensus estimates cited by The Wall Street Journal.
As for the returns from the predictions investments, the 2027 guidance says the company is expecting around $650 million to $750 million in revenue.
“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,” cofounder and CEO Jason Robins said in the report.
He added, “More than 1.6 million customers have engaged with Predictions year-to-date, and combined with the strength of our core, we believe we are set up for an exceptional 2027.”