DraftKings Cuts Outlook as It Pours More Money Into Prediction Markets — Update

What happened

DraftKings cut its full-year revenue outlook to $6.35 billion–$6.55 billion from $6.5 billion–$6.9 billion and lowered its adjusted earnings outlook to $175 million–$275 million from $700 million–$900 million. It cited a planned $650 million–$700 million investment in prediction markets, whose revenue it expects to be immaterial this year.

Confirmed

Global impact / market context

The investment is expected to weigh on near-term earnings because DraftKings says customer promotions will offset most prediction-market revenue this year. If the business later generates the forecast sales, it could support growth, but the article gives no timing or profit outlook for that contribution.

Analyst inference

The company’s 2027 revenue outlook of $7.35 billion–$7.75 billion is below analysts’ $7.61 billion projection at the low end but above it at the high end. DraftKings shares fell 24% to $17.81 in after-hours trading after the update.

Confirmed

What to watch

1. Track whether DraftKings keeps prediction-market investment within its stated $650 million–$700 million range, since spending above it could put further pressure on earnings. Analyst inference
2. Watch reported prediction-market sales against the company’s 2027 forecast of $650 million–$750 million; that comparison will show whether the business is gaining revenue. Analyst inference
3. Check future updates for changes to the fourth-quarter investment plan of $175 million–$225 million and whether promotions continue to offset most prediction-market revenue. Analyst inference

Evidence

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