DraftKings Raises Predictions Investment to $700M in 2026

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DraftKings raised its 2026 predictions investment by $50 million to $700 million and modeled a scenario in which sports event contracts end on July 31, 2028.
DraftKings reported third-quarter iGaming net revenue of $460.9 million, up 2.1%, while iGaming customer acquisition grew 76% year-over-year.

DraftKings increased its 2026 predictions investment to $700 million in its third-quarter earnings update, while outlining how it could recover costs without sports event contracts.

The company’s downside model addresses legal uncertainty surrounding sports contracts, which dominate its predictions customer activity. According to SBC Americas, DraftKings expects non-sports markets, Pick6, lottery and cross-selling to help recover value if those contracts disappear.

DraftKings Models Slower Payback Without Sports Contracts

DraftKings CEO Jason Robins said in the company’s shareholder letter that customers acquired during 2026 would repay their acquisition costs before the modeled cutoff.

“Even if sports contracts were to end in July 2028, we estimate our 2026 cohort would be fully paid back before that date,” Robins said, as reported by SBC Americas.

For customers acquired in 2027, DraftKings projected more than 50% payback by that point and full payback within four years without sports contracts. Its downside assumption puts gross profit per predictions customer at 20% of today’s level, extending that cohort’s payback period from Month 18 to Month 41.

More than four in five predictions customers have traded only sports to date, the company said. Nearly 20% have traded non-sports markets, where consumer volume per customer has so far been on par with sports.

Casino Acquisition Rises as Marketing Costs Increase

DraftKings’ iGaming customer acquisition growth substantially outpaced its casino revenue growth in the third quarter. The company operates iGaming in five states, covering approximately 11% of the U.S. population.

Sportsbook net revenue increased 36% on 12% handle growth. DraftKings said its handle share improved year-over-year for the fourth consecutive quarter.

Across the company, third-quarter sales and marketing expenses reached $605.7 million, up 68% year-over-year. DraftKings reported an adjusted EBITDA loss of $316.9 million and said it maintained approximately $1.1 billion in cash.

DKeX Expansion and 2027 Guidance

More than 1.6 million customers engaged with predictions year-to-date, according to DraftKings. Trades on DKeX generated an 11.1% take rate on consumer volume during September and October: DraftKings retained 7.3%, while third-party market makers captured 3.8%.

For 2027, DraftKings guided to total revenue of $7.35 billion to $7.75 billion and adjusted EBITDA of $800 million to $1 billion. Those projections include predictions revenue of $650 million to $750 million and predictions investment of $250 million to $350 million.

As part of its broader push into prediction markets, DraftKings also plans to move crypto markets onto DKeX over the next month.

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Source: As reported by SBC Americas.