DraftKings used its earnings to show prediction markets are already making money and improving the broader economics of the business.
DraftKings reported stronger-than-expected first-quarter results Thursday while outlining a more aggressive push into sports event contracts, with CEO Jason Robins describing DraftKings’ third-party prediction market-making venture as one of the fastest paths to profitability in company history.
The emphasis differed from FanDuel, whose parent Flutter Entertainment spent much of its earnings call focused on repairing sportsbook performance after a disappointing start to the year, even as it pushes its own prediction market ambitions.
“Our core business is strong, and profitability is inflecting,” Robins said in the earnings release. “That gives us the firepower to press our advantage in Predictions.”
DraftKings earnings top estimates
DraftKings reported $1.65 billion in first-quarter revenue, up 17% from $1.41 billion a year earlier. Adjusted EBITDA rose 63% to $168 million, while the company posted $21 million in net income compared to a $34 million loss in the prior-year quarter.
Sportsbook handle rose 1.5% year-over-year to $14.1 billion, while sports betting revenue increased 24% to $1.09 billion as net revenue margin improved to 7.8% from 6.4%. Robins said April trends remained strong, with handle up 6% and revenue up 22%.
Meanwhile, FanDuel’s U.S. sportsbook revenue rose just 1% as handle fell 9%, though executives largely blamed the weak quarter on promotional execution missteps that prompted a leadership shakeup and “sportsbook improvement plan”.
DraftKings averaged 4.2 million monthly unique payers in the first quarter, down 4% year-over-year due largely to its lottery exit from Texas. Excluding lottery, MUPs rose 2%, while average revenue per monthly payer jumped 21% to $131 as sportsbook margins improved.
Predictions move deeper into the core
DraftKings expects to spend close to $300 million this year on prediction markets, primarily on marketing, while retaining flexibility to pull back if returns disappoint.
Traditional sportsbook customers remain more valuable over time, and when users have access to both products, many still prefer the sportsbook experience, according to Robins. But prediction markets have created a much cheaper national acquisition funnel for DraftKings, particularly in states where sportsbooks remain unavailable.
“We have the entire other half of the country open to us now and we haven’t even begun to ramp up marketing,” Robins said.
The company is already seeing lower customer acquisition costs as a result and expects a “tremendous increase” in monthly unique payers in the back half of the year, Robins added.
Beginning next quarter, DraftKings will combine sportsbook and prediction market revenue into a single “sports revenue” reporting category.
DraftKings reported roughly $85 million in April prediction market “consumer volume,” which excludes market-makers and is closer to sportsbook handle, with “total volume topping” $190 million. That was up from March’s $62 million in consumer volume and $134 million in total volume.
Market making emerges as early profit engine
DraftKings revealed it launched a third-party prediction market trading business earlier this year, using its sportsbook trading capabilities to profit on rival platforms like Kalshi and Polymarket. FanDuel announced a similar venture earlier this week.
Robins said its quickly became one of the fastest profitability lines in company history.
“We’re making money. It’s one of our fastest to profitability business lines we’ve ever launched, so really excited about that,” Robins said. “We think a lot of opportunity to scale it. We should theoretically have one of the top two or three market makers in the world, arguably the best, given our modeling capabilities.”
The company’s investor day in March had already outlined plans for deeper exchange infrastructure, including a proprietary exchange and expanded in-house market-making capabilities. Thursday’s call suggested parts of that strategy are scaling much faster than expected, with returns expected by football season.
Robins takes aim at rival prediction markets
Robins also took direct aim at prediction market operators that market peer-to-peer event contracts as inherently more consumer-friendly than sportsbooks, arguing the label obscures a market structure where sophisticated traders often dominate the other side of consumer bets.
He likened the dynamic to DraftKings’ early daily fantasy sports experience and said the company’s internal data suggests prediction market customers are losing money faster than sportsbook bettors.
“When you have a peer-to-peer, you know, somewhat of a peer-to-peer setup, you’re gonna have people on one side that are experts, and you gotta make sure you protect the ecosystem as best as you can, obviously within the rules and regulations,” Robins said.
“Doing things to make sure that you’re building a healthy ecosystem was critical to us building out a sustainable daily fantasy sports product. Right now, I don’t see that necessarily happening with some of our predictions competitors.”
FanDuel provides a revealing contrast
Robins said prediction markets and sportsbooks serve the same customers in the same live moments, part of DraftKings’ broader push toward a more seamless “super app” experience.
FanDuel announced a similar single app experience this week, discussing prediction markets alongside sportsbook product upgrades, loyalty enhancements and efforts to better adapt to customer behavior. Both companies are also leveraging internal sportsbook trading infrastructure.
For Flutter, however, the immediate focus remains tied to sportsbook improvements and football-season execution, with much of its 2026 profit outlook weighted toward the fourth quarter. Robins, by contrast, said DraftKings expects a more typical seasonal cadence.
DraftKings maintained its full-year guidance of $6.5 billion to $6.9 billion in revenue and $700 million to $900 million in adjusted EBITDA.
