DraftKings does not possess a crystal ball that shows how the CFTC or Supreme Court will settle the long-term future of prediction markets in the United States.
Reading between the lines of the letter penned Thursday to investors by DraftKings CEO Jason Robins, though, might make one believe otherwise. Such is the confidence expressed by Robins not just in the future of the U.S. prediction markets opportunity, but in his company’s charted path to dominance in the newly built arena.
In releasing its Q1 earnings report, DraftKings held steady its fiscal year guidance ranges of $6.5b to $6.9b in revenue and $700m to $900m in adjusted EBITDA. The operator also touted a 17% year-over-year revenue increased 17% to $1.6b, as well a 64% adjusted EBITDA increase to $168m.
Markets reacted well to the strong numbers, bumping $DKNG stock up more than 5% to $25 a share before giving back a fraction of those gains in after-hours trading.
“We are off to a fantastic start to the year,” Robins wrote. “Our first quarter results exceeded our expectations.”
While Robins touted 24% YOY sportsbook growth as the primary driver of that start, his optimism ramped even higher in discussing DraftKings Predictions.
“Our core business is strong, and profitability is inflecting. That gives us the firepower to press our advantage in Predictions,” Robins wrote.
DraftKings Predictions grabs focus in Robins letter
Most know the roots of DraftKings as a daily fantasy sports operator that positioned itself over years for a strong start to online sports betting after the Supreme Court struck down PASPA in 2018.
This earnings report, though, could provide the strongest signal to date that a major OSB and iGaming operator sees prediction markets here for a longer term. Beginning with Q2 earnings, Robins wrote that DraftKings “will report Sports revenue, which will combine Sportsbook and Sports Predictions. This best reflects how we plan to operate the business.”
If DraftKings sees sports ‘trading’ potentially outlasting the current friendly federal regulatory climate from the Trump CFTC, it could create a lasting vertical for DraftKings that allows the company to challenge FanDuel for U.S. market supremacy. Robins noted that the company’s volume traded per customer now tracks above sportsbook handle per customer. Annualized volume traded in April topped $2.3b, a 43% month-on-month increase.
“Predictions, especially in Sports, is a strategic priority for DraftKings. This category is still in its first inning, and we believe DraftKings is best positioned to define it,” Robins wrote. “We are planning significant investment in the coming months to improve our offering, build liquidity, and scale customer acquisition. We intend to execute with urgency and establish a leadership position in Sports Predictions before year-end.”
Where DraftKings sees prediction markets edges
Robins highlighted the key areas he sees as advantages for DraftKings Predictions as a company grounded in sportsbook seeking to “serve the same customers in the same live moments and leverage a shared underlying infrastructure … whether the customer experience is structured as a bet or a contract.”
- Super App integration: both DraftKings and FanDuel now tout the ability to reach customers in legal and non-legal sportsbook states through a single app that directs them to the appropriate product. Robins noted that customer acquisition costs dropped 80% in April as a result of the integration.
- Market making capability: Robins wrote that this launched capability “unlocks access to an additional layer of the value chain and is generating a positive return for us.”
- Proprietary exchange launch: Robins said this will happen in the coming weeks. DraftKings acquired CFTC-licensed Railbird Exchange in October 2025.
Everyone can eat, sportsbook CEOs say
Echoing Flutter CEO Peter Jackson in that company’s Wednesday earnings call, Robins contended prediction markets including Kalshi and Polymarket are not cannibalizing sportsbook customers.
“Internal and third-party data suggest Predictions is impacting Sportsbook industry handle only very slightly and primarily among low-margin wagers, resulting in a negligible impact to revenue,” the letter reads.
The DraftKings investor deck released Thursday highlights a recent Eilers & Krejcik study in estimating nearly 70% of Predictions Sports Consumer Volume comes from states without regulated sportsbooks. That metric is defined as contracts traded times execution price.
