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DraftKings Pushes Into Prediction Markets: A New Growth Lane?
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Key Takeaways
DraftKings launched DraftKings Predictions in late 2025, expanding into prediction markets.
DKNG's predictions had a de minimis impact on sportsbook revenues, with only slight effects on January handle.
DKNG plans to monetize via platform transaction fees and market-making using its sports modeling tools.
DraftKings Inc. (DKNG - Free Report) is accelerating its push into prediction markets, positioning the new vertical as a potential new growth avenue alongside its core sportsbook and iGaming businesses. Management described the category as the most compelling opportunity the company has seen since the legalization wave triggered by the repeal of PASPA in 2018.
DKNG launched DraftKings Predictions late in 2025 and is already expanding the product with additional trading options, exchange integrations and a forthcoming market-making division. Early engagement indicators appear encouraging. On Super Bowl Sunday, the platform ranked second in downloads within its category and delivered roughly three times its prior record for daily trading volume, suggesting early traction despite the product still being in an early development phase.
Management indicated the product has not materially affected sportsbook revenues so far. Internal and third-party data suggested only a slight impact on January sportsbook handle, with any small effects concentrated among lower-margin users. Consequently, the revenue impact so far has been described as “de minimis.”
Strategically, DraftKings plans to monetize predictions through two primary channels. First, the company can collect transaction fees by owning the customer-facing trading platform. Second, it expects to generate trading profits through market-making and proprietary trading, leveraging its existing sports modeling and trading infrastructure.
The company’s existing sportsbook ecosystem may offer structural advantages in this category. DraftKings already operates extensive pricing models, a large data science team and a trading desk capable of managing live probabilities in real time. Combined with its large customer base and national marketing partnerships, management believes these capabilities could help accelerate user adoption and liquidity in prediction markets.
DKNG’s Price Performance, Valuation & Estimates
DraftKings’ shares have declined 28.5% in the past three months compared with the industry’s 17% fall. In the same time frame, other industry players like Accel Entertainment, Inc. (ACEL - Free Report) and Boyd Gaming Corporation (BYD - Free Report) have gained 26.1% and 3.2%, respectively, while Melco Resorts & Entertainment Limited (MLCO - Free Report) has declined 33.7%.
DKNG Three-Month Price Performance
Image Source: Zacks Investment Research
DKNG stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-sales (P/S) multiple of 1.76, below the industry average of 2.21. Conversely, industry players, such as Accel Entertainment, Melco Resorts and Boyd Gaming, have P/S ratios of 0.79, 0.42 and 1.50, respectively.
DKNG’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for DraftKings’ 2026 earnings per share has declined in the past 30 days.
EPS Trend of DKNG Stock
Image Source: Zacks Investment Research
The company is likely to report solid earnings, with projections indicating a 72.7% surge in 2026. Conversely, industry players like Accel Entertainment, Boyd Gaming and Melco Resorts are likely to witness a rise of 11.7%, 2.2% and 15.2%, respectively, year over year in 2026 earnings.
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DraftKings Pushes Into Prediction Markets: A New Growth Lane?
Key Takeaways
DraftKings Inc. (DKNG - Free Report) is accelerating its push into prediction markets, positioning the new vertical as a potential new growth avenue alongside its core sportsbook and iGaming businesses. Management described the category as the most compelling opportunity the company has seen since the legalization wave triggered by the repeal of PASPA in 2018.
DKNG launched DraftKings Predictions late in 2025 and is already expanding the product with additional trading options, exchange integrations and a forthcoming market-making division. Early engagement indicators appear encouraging. On Super Bowl Sunday, the platform ranked second in downloads within its category and delivered roughly three times its prior record for daily trading volume, suggesting early traction despite the product still being in an early development phase.
Management indicated the product has not materially affected sportsbook revenues so far. Internal and third-party data suggested only a slight impact on January sportsbook handle, with any small effects concentrated among lower-margin users. Consequently, the revenue impact so far has been described as “de minimis.”
Strategically, DraftKings plans to monetize predictions through two primary channels. First, the company can collect transaction fees by owning the customer-facing trading platform. Second, it expects to generate trading profits through market-making and proprietary trading, leveraging its existing sports modeling and trading infrastructure.
The company’s existing sportsbook ecosystem may offer structural advantages in this category. DraftKings already operates extensive pricing models, a large data science team and a trading desk capable of managing live probabilities in real time. Combined with its large customer base and national marketing partnerships, management believes these capabilities could help accelerate user adoption and liquidity in prediction markets.
DKNG’s Price Performance, Valuation & Estimates
DraftKings’ shares have declined 28.5% in the past three months compared with the industry’s 17% fall. In the same time frame, other industry players like Accel Entertainment, Inc. (ACEL - Free Report) and Boyd Gaming Corporation (BYD - Free Report) have gained 26.1% and 3.2%, respectively, while Melco Resorts & Entertainment Limited (MLCO - Free Report) has declined 33.7%.
DKNG Three-Month Price Performance
Image Source: Zacks Investment Research
DKNG stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-sales (P/S) multiple of 1.76, below the industry average of 2.21. Conversely, industry players, such as Accel Entertainment, Melco Resorts and Boyd Gaming, have P/S ratios of 0.79, 0.42 and 1.50, respectively.
DKNG’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for DraftKings’ 2026 earnings per share has declined in the past 30 days.
EPS Trend of DKNG Stock
Image Source: Zacks Investment Research
The company is likely to report solid earnings, with projections indicating a 72.7% surge in 2026. Conversely, industry players like Accel Entertainment, Boyd Gaming and Melco Resorts are likely to witness a rise of 11.7%, 2.2% and 15.2%, respectively, year over year in 2026 earnings.
DKNG currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.