DraftKings’ effort to solidify a footprint in the nascent prediction market space will not only continue but ramp up, CEO Jason Robins told investors during the company’s latest earnings call.
The Boston-based gaming giant released its Q4 2025 earnings, reporting $1.9 billion in revenue for the quarter, a 43% year-over-year increase. DraftKings posted an adjusted EBITDA of $343 million in Q4, nearly four times the $89.4 million it earned for the same period last year. Its net income reached $136.4 million, compared to a net loss of $134 million in Q4 2024.
All told, DraftKings reported quarterly records for both revenue and adjusted EBITDA as the company expands its reach through event contracts with DraftKings Predictions.
“Predictions is rapidly developing into a massive, incremental opportunity, and we are moving with urgency,” said Robins in a letter to shareholders. “We expect to emerge as the leader in this nascent category. We plan to deploy growth capital to build the best customer experience in Predictions and acquire millions of customers.”
CFTC approach strengthens DraftKings’ resolve
DraftKings plans to continue investing in its prediction market product amid a new favorable approach to event contract regulation by Commodity Futures Trading Commission (CFTC) Chair Michael Selig.
Last month, Selig required CFTC staff to withdraw a rule proposal to ban the delivery of political and sports event contracts. The CFTC rescinded the proposal as Selig plans to develop a new federal regulatory framework for prediction markets that embraces the vertical.
Selig intends to craft a new set of rules for the type of event contracts offered by DraftKings, FanDuel, Kalshi and Crypto.com and provide a framework for controversial sports event contracts as litigation over the products continues in courts around the U.S.
“I think part of [the excitement] is there has been a real lean-in from the CFTC,” said Robins during Friday’s earnings call. “What went from sort of a hands-off, ‘we are not going to comment’ posture from the previous interim chair is now a full-fledged affirmation that this is something that the CFTC considers to be firmly under their jurisdiction, that they intend to defend in the courts and that they are going to issue real guidelines and regulations.”
Robins will have the opportunity to collaborate with Selig and the CFTC as a member of the commission’s new Innovation Advisory Committee. The committee has 35 members who have leadership roles in crypto, prediction markets and finance.
Predictions not impacting sportsbook revenue … yet
Robins indicated that DraftKings will continue to pump resources into its event contracts. The CEO told investors and analysts that the prediction market offerings have yet to draw cannibalization concerns regarding the company’s betting operations.
“To date, we are not seeing a discernible impact from predictions on our revenue,” continued Robins. In Q4, the company’s sportsbook handle grew 13% year-over-year.
DraftKings reported strong interest in its prediction platform ahead of Super Bowl LX, and the company expects that momentum to continue as it continues to build the product, especially as states without sports betting like Texas and California embrace the offering.
“Predictions is the most exciting new growth opportunity we have seen since PASPA struck down in 2018,” added Robins. “Early signals are strong.”
According to analyst estimates cited by Robins, DraftKings Predictions could provide the company with up to $10 billion in annual gross revenue in the coming years.
DraftKings braces for the future
The projections come as states across the country impose new tax requirements for sports betting operators amid a new proposal in Michigan to implement a per-wager tax that mirrors Illinois. The per-wager tax could require operators to pay up to 50 cents per bet. Lawmakers in Arizona are also considering tax changes for sports betting.
“States would be absolutely crazy right now to raise taxes with everything going on with predictions,” said DraftKings CFO Alan Ellingson during the earnings call.
DraftKings will continue to invest in its prediction market product as it expects full-year revenue in 2026 to range between $6.6 billion and $6.9 billion. By comparison, revenue for the gaming giant in 2025 reached $6 billion. DraftKings expects to report an adjusted EBITDA that ranges between $700 million and $900 million in 2026. Last year, DraftKings posted an adjusted EBITDA of $620 million. Net income for the company was $3.7 million.
The consensus from analysts was that despite the additional revenue opportunity brought by predictions, the guidance was underwhelming compared to expectations.
