DraftKings Q3 Results Show Increased Revenues, Heavy Investment in Prediction Markets

• DraftKings released its 2026 Q3 results this week
• DraftKings reported $1.329 billion in revenue for the quarter, an increase of $185 million
• More than 1.6 million customers engaged with DraftKings Predictions and the company plans to invest more in the product

DraftKings reported increased revenues during its released 2026 Q3 results and new plans to boost investment into its popular prediction market offerings.

DraftKings CEO and Co-Founder Jason Robins reported total revenues of $1.329 billion for the quarter, an increase of $185 million, or 16%, compared with revenues of $1.144 billion during the same period in 2025. The increase in revenues, he said, was driving primarily by customer engagement and higher sportsbook net revenue margin.

Additionally, the company’s prediction market offerings saw more than 1.6 million customers engage with the product and annualized consumer volume reached $10.1 billion, a nearly three-times increase from July, and annualized total volume traded reached $56.8 billion.

Heavy Predictions Investment

Robins lauded the company’s predictions market product, reporting that its 2026 predictions cohort is outperforming the two-year paybacks the company targeting. Additionally, nearly 20% of its predictions customers have traded non-sports markets, with Crypto leading the way.

“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,” Robins said in a press release. “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.”

To account for increased investment in its predictions offerings, the company adjusted its fiscal year 2026 adjusted EBITDA range of $175 million to $275 million. This adjustment accounts for the company’s increased Adjusted EBITDA investment in predictions of $650 million to $700 million.

In 2026, DraftKings reported its predictions revenue would be “immaterial,” as new customer promotions will offset the majority of gross revenue generated.

Robins pointed to the company’s prediction market cohorts by year and how they will pay back prior to any potential U.S. Supreme Court ruling on event contracts. Robins said the 2026 cohorts will pay back in approximately 20 months on an adjusted gross profit basis, while the 2027 cohort will pay back in approximately 18 months.

If sports event contracts end in July 2028 after a SCOTUS ruling, Robins said, the 2027 cohort will be 50% paid back and fully paid back within four years. He did not provide a reason as to why DraftKings chose the July 2028 date for a potential SCOTUS ruling.

Sports Betting Revenue Increases

Robins reported DraftKings Q3 sports betting net revenue increased 36% year-over-year, with Q3 reports of $784 million in net sports betting revenue. Handle growth also increased by 12%, Robins, said, and would have been higher if not for the significant increase in sportsbook net revenue margin.

“The World Cup provided a boost, which was fully offset by one fewer week of college football and NFL, so 12% growth is a true like-for-like comparison. We continue to see healthy handle and revenue growth, further substantiating our view that prediction market operators are having no discernible impact on our sportsbook business,” Robins wrote in a letter to shareholders.

“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,” Alan Ellingson, DraftKings’ Chief Financial Officer, said in a press release. “We are introducing fiscal year 2027 revenue guidance of $7.35 billion to $7.75 billion, an increase of 17% year-over-year at the midpoint, and Adjusted EBITDA guidance of $800 million to $1.0 billion, which includes $300 million of Adjusted EBITDA investment in Predictions at the midpoint.”