DraftKings Cuts Outlook as It Pours More Money Into Prediction Markets

What happened

DraftKings lowered its 2026 revenue outlook to $6.35 billion–$6.55 billion from $6.5 billion–$6.9 billion, and its adjusted earnings outlook to $175 million–$275 million from $700 million–$900 million. It attributed the cuts to 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 spending is expected to weigh on near-term earnings because DraftKings says customer promotions will offset most prediction-market revenue this year. If the offering attracts customers and later generates meaningful sales, it could support growth; if costs persist without that revenue, earnings may remain under pressure.

Analyst inference

DraftKings also forecast 2027 revenue of $7.35 billion–$7.75 billion, below the $7.61 billion analysts project, while expecting prediction markets to contribute $650 million–$750 million in sales. That gap makes delivery of the new business’s projected sales relevant to future revenue expectations.

Analyst inference

What to watch

1. Watch whether DraftKings spends the planned $175 million–$225 million on prediction markets in the current fourth quarter, and whether it reports progress against that investment. Confirmed
2. Look for updates on customer promotions and prediction-market sales, since the company says promotions offset most gross revenue and expects this year’s revenue to be immaterial. Analyst inference
3. Compare reported 2027 revenue with the $7.35 billion–$7.75 billion outlook and the projected $650 million–$750 million from prediction markets to assess delivery. Analyst inference

Evidence

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