DraftKings Stock Falls 21% as Prediction Market Spending Doubles
DraftKings' stock plunges 21% after the company said it will spend more than planned for DraftKings Predictions. What does it mean for bettors?
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DraftKings shares fell 21% to $18.51 on Friday, November 6, 2026, after the company said it would spend far more than planned to grow DraftKings Predictions this year. The Boston company now expects to invest $650 million to $700 million in its prediction market business in 2026, mostly on marketing and new-customer promotions.
The spending was disclosed with DraftKings’ third-quarter results on November 5, as The Boston Globe reported. It is more than twice the level the company had given before.
What DraftKings Reported
The core business had a strong quarter. Third-quarter revenue rose 16% from a year earlier to $1.33 billion, and monthly unique payers grew 13% to 4.1 million. Sports consumer volume, a measure of how much customers bet, rose 22%.
- Sports revenue: up 31.5% to $783.6 million.
- Sportsbook net revenue margin: 6.4%, up about 1.2 percentage points.
- iGaming revenue: up 2.1% to $460.9 million.
- Adjusted EBITDA: a loss of $317 million for the quarter, driven by the Predictions spending.
The New Guidance
DraftKings cut its 2026 revenue guidance to $6.35 billion to $6.55 billion, down from $6.5 billion to $6.9 billion. Adjusted EBITDA guidance fell to $175 million to $275 million, from $700 million to $900 million. Without Predictions, the company expects $875 million to $925 million in adjusted EBITDA from its core business.
Predictions revenue will barely register this year. The company says new-customer promotions will offset most of the gross revenue the product brings in, and it expects $175 million to $225 million more in Predictions spending in the fourth quarter.
For 2027, DraftKings expects total revenue of $7.35 billion to $7.75 billion. That includes $650 million to $750 million from Predictions, with spending on the product falling to $250 million to $350 million.
Why Investors Are Nervous
The future of sports prediction markets may rest with the courts. Appeals courts have split on whether states can regulate sports event contracts, and New Jersey has asked the Supreme Court to take up the question.
Morningstar analyst Dan Wasiolek told the Globe the stock was “getting creamed right now” because investors questioned spending so heavily before that ruling. On the earnings call, CEO Jason Robins said the investment will pay back over time even if the Court rules against sports contracts, in part by cross-selling Predictions customers into DraftKings’ other products.
The company says its 2026 Predictions customers are on track to repay their cost in about 20 months.
Robins also said DraftKings has become the third-largest prediction market operator, behind Kalshi and Polymarket. He said it remains tied with FanDuel for first place in US sports betting.
What It Means for Bettors
DraftKings Sportsbook and DraftKings Predictions are separate products. The sportsbook is licensed state by state, while Predictions sells event contracts under federal CFTC rules, including in states where the sportsbook isn’t live.
Heavy spending on new customers usually shows up as bigger sign-up offers, and DraftKings says promotions are absorbing most of its Predictions revenue for now. Our DraftKings Sportsbook review covers the current sportsbook offer and where it’s legal.
To see how the company’s prediction markets compare with the market leader, read our Kalshi review.
Our prediction market tracker follows the court cases that could decide the product’s future.
Event contracts and sports bets carry a risk of loss. Promotions have terms and conditions, and availability varies by state.
