DraftKings used its investor day to unveil plans for a unified “super app” that combines its sportsbook, casino, lottery and prediction markets into a single platform.
DraftKings Sports & Casino will operate through a single account and wallet, tailoring content and product availability based on customer jurisdiction. The structure allows DraftKings to offer traditional sports betting in regulated states and CFTC-approved prediction markets elsewhere, under one consistent sports interface nationwide.
Management positioned it as the distribution vehicle for a larger total addressable market, but avoided new long-term earnings targets in its presentation. Analysts described bringing all products under one point of interaction and download as the “obvious next phase,” as the company undergoes another period of elevated investment.
Shares of DKNG rose on the news, but the stock remains roughly down 45% over the past year following a weaker-than-expected 2026 outlook issued with fourth-quarter earnings in February. That guidance accounted for hundreds of millions in planned prediction market investment this year, but excluded potential upside from the product, an approach management believes will help overdeliver.
Prediction markets move into the core
Jeanine Hightower-Sellitto, general manager of Predictions, said the strategy to win in the category “will largely follow our sportsbook playbook,” citing vertical integration and DraftKings’ proprietary pricing and trading capabilities. She handled much of the presentation, a departure from prior investor events led primarily by CEO Jason Robins.
Phase one is targeted for March Madness, with additional upgrades planned ahead of the NFL season.
The super app approach effectively extends a sportsbook-like experience into states without legalized sports betting, with backend differences largely invisible to customers. Management emphasized that serving the optimal content for each jurisdiction removes friction and simplifies the customer experience.
DraftKings believes prediction markets represent a potential $10 billion annual gross revenue opportunity over time. It updated its total addressable market estimates, projecting growth from $34 billion in 2025 to between $55 billion and $80 billion by 2030.
DraftKings to own more backend
DraftKings plans to launch an in-house market-making division to supply liquidity and tighten pricing, and bring more exchange-related functions in-house over the next few months. It currently relies on third-party exchange infrastructure from CME Group, and recently acquired Railbird.
Management said that should help to capture additional economics and move faster on product development, similar to its earlier efforts to transition parts of its sportsbook platform away from outside providers.
Hightower-Sellitto specifically pointed to its “parlay engine” as a competitive advantage as it develops more prediction offerings modeled after the customizable betting features popular in its sportsbook.
DraftKings reiterated a long-term adjusted EBITDA margin target of 30%, adding an “or higher,” but did not provide new multi-year EBITDA dollar targets. At its November 2023 investor day, the company issued specific earnings benchmarks that have since been revised lower.
Analysts see upside despite investing
Truist analyst Barry Jonas maintained a Buy rating and $33 price target, writing that while no new explicit earnings targets were provided, the updated total addressable market outlook and super app strategy offer “marketing synergies across verticals.” He noted that some investors will continue to view this year for DraftKings as a “show-me story.”
Citizens analyst Jordan Bender reiterated his market outperform rating and $38 price target, describing the super app as the “obvious next phase” of product evolution. He wrote that the move to a 30%+ long-term margin framework implies prediction markets could be additive over time, pointing to management’s expectation of 60% to 80% gross margins in the category.
Bender also cautioned that marketing tied to predictions could weigh on results in the near term before efficiencies scale, reminding investors that investment has long been part of DraftKings’ playbook.
Macquarie analyst Chad Beynon reiterated his outperform rating and $40 price target, calling DraftKings a “best-in-class” operator and describing the recent share price decline as an opportunity to buy the stock at a discount to historical valuation.
