Analysis

    DraftKings Q2 2026: Predictions Volume Hits $11 Billion as CEO Pledges to Lead the Category

    DraftKings Q2 revenue dipped 5%, but Predictions volume hit $11B—up 5x since April. CEO Jason Robins pledges to win prediction markets heading into NFL season.

    By PredictionMarkets.usFriday, August 7, 20269 min read
    DraftKings Q2 2026: Predictions Volume Hits $11 Billion as CEO Pledges to Lead the Category

    DraftKings delivered a paradox in its second-quarter 2026 earnings: headline revenue that fell short of expectations, and a prediction markets business growing faster than anyone—including management—had anticipated.

    For investors focused on the top line, Q2 was disappointing. For anyone watching prediction markets, it was a milestone.

    Q2 By the Numbers: Revenue Dips, Volume Soars

    DraftKings reported revenue of $1.443 billion for the three months ended June 30, 2026, a decrease of $69 million, or 5%, compared with $1.513 billion in Q2 2025. The company posted a net income loss of $67.6 million for the quarter.

    The culprits were familiar: customer-friendly sports outcomes—most notably the New York Knicks winning the NBA championship in DraftKings' largest sportsbook state, and a string of World Cup group-stage results that paid out heavily to bettors—created an estimated $80 million revenue headwind in the quarter. Higher-than-planned spending on customer acquisition compounded the pressure.

    Strip those out, and the picture looks different. Normalized revenue—excluding the sports-outcome drag and elevated acquisition costs—grew 10% year-over-year, according to the company's Q2 earnings presentation.

    Under the hood, the core business accelerated:

    MetricQ2 2026 ResultYear-over-Year
    Sports Consumer Volume$13.1 billion+15%
    Customer acquisition—+75%
    Customer acquisition cost (CAC)Best since Q1 2025Improved
    Monthly Unique Payers (ex-lottery)3.3 million+13%
    Predictions annualized volume$11 billion (July)~5x from April

    The company maintained its full-year 2026 guidance: revenue of $6.5 billion to $6.9 billion and adjusted EBITDA of $700 million to $900 million.

    "Predictions Is Already Growing Faster Than We Anticipated"

    CEO Jason Robins led with the prediction markets story in the Q2 press release—an unusual choice for a quarter where revenue missed estimates.

    "We delivered a strong second quarter and enter the back half of the year with real momentum, as our core business grew across handle, users, and engagement," Robins said. "Our Super App is now live nationwide, and Predictions is already growing faster than we anticipated. The similarity of Predictions customer metrics to Sportsbook customer metrics, our advantaged LTV position, and our playbook to innovate on a leading Predictions offering all underpin our confidence that we can win the category this NFL season and beyond."

    The numbers behind that confidence are stark. DraftKings Predictions launched on December 19, 2025, initially covering 38 states. By August 2026, the platform had expanded to 48 states (all except Maine and New Hampshire), with sports event contracts live in 18 states. More than 600,000 customers have used the product year-to-date.

    The volume growth is the headline: predictions annualized volume stood at approximately $2.3 billion in April. By July, that figure had reached $11 billion—nearly a five-fold increase in roughly three months.

    CFO Alan Ellingson matched Robins' confidence from the financial side: "Our core business remains on track to generate approximately $1 billion of Adjusted EBITDA this year, providing us with financial flexibility to invest behind the significant opportunity that we are seeing in Predictions. Therefore, we are maintaining our fiscal year 2026 guidance for revenue of $6.5 billion to $6.9 billion and Adjusted EBITDA of $700 million to $900 million."

    No Cannibalization—The Data Shows DraftKings Is Expanding the Market

    The question analysts and competitors have asked since prediction markets launched in late 2025: are these platforms pulling volume away from traditional sportsbooks, or growing the pie?

    Robins addressed it directly on the earnings call. "There is minimal, if any, cannibalisation happening," he said, citing both internal analysis and third-party data. The company estimates that 80% to 90% of prediction market consumer volume in sportsbook states comes from professional betting syndicates and institutional traders—volume that, as Robins noted, "mostly would not have been on sportsbooks to begin with."

    The customer overlap metric is even more striking: only roughly 1% of DraftKings sportsbook customers in sportsbook states also use the leading prediction market operator. That's not a migration. That's a separate market.

    DraftKings also disclosed that combos—combined-leg prediction market contracts—are approaching 20% of total Predictions Consumer Volume, with more than half of Predictions customers having engaged with the feature. "Combos have been an absolute smash," Robins said. The combo product is DraftKings' most direct departure from standalone prediction market contracts and its clearest attempt to build a differentiated product.

    $200–$300 Million Invested in the NFL Season's Biggest Bet

    The NFL season begins in September—the first full NFL campaign in which prediction markets will compete directly for attention alongside traditional sportsbooks. DraftKings is treating it as the defining moment for the category.

    The company plans to invest an incremental $200 million to $300 million in predictions during 2026, with the bulk directed toward marketing and customer acquisition heading into the football season. Robins acknowledged the company may invest even more aggressively if customer acquisition costs remain as favorable as they were in Q2, when spending ran 10% above plan but CACs came in 25% better than expected.

    "We are not building to participate," Robins said. "We are building to lead and win."

    That confidence extends to states like California and Texas—two massive markets where online sports betting remains illegal but prediction markets can operate. DraftKings said customers in those states are showing profiles similar to those in regulated sportsbook markets, reinforcing its thesis that prediction markets represent an entirely new distribution channel.

    How DraftKings Competes: Owning the Full Stack

    What separates DraftKings from most prediction market players is vertical integration. The company operates through GUS III LLC d/b/a DraftKings Predictions, an NFA-approved Futures Commission Merchant (FCM), and runs its own DKeX exchange—built on the CFTC-licensed Railbird DCM it acquired in October 2025 and launched on June 26, 2026.

    "In predictions, we own the front end, the exchange, and the market maker," Robins said on the earnings call. "We are consistently making markets on both singles and combos at a profit." The company noted this mirrors the playbook it used in sportsbook, where DraftKings now prices and trades roughly 95% of content in-house.

    DraftKings' fee model for predictions: $0.01 per contract per side—a flat platform fee disclosed in its NFA documentation. That's distinct from the percentage-based fee structures used by Kalshi and Polymarket US.

    A Note on Earnings Calls as Prediction Market Fodder

    In an unusual moment of self-awareness, Robins used his Bloomberg TV interview Friday to take aim at a corner of the prediction market world that has grown up around him.

    "Making trades on whether someone will say something on an earnings call is probably not something that should be out there," Robins told Bloomberg, referring to prediction markets—including some run by DraftKings competitors—that allow bets on which words executives will use or whether specific phrases will appear on quarterly calls.

    The comment drew attention because DraftKings itself is one of the companies now operating a prediction market platform. It also reflects the genuine tension within the industry about what category of contracts should and shouldn't exist.

    What This Means for the Broader Prediction Market Industry

    DraftKings' Q2 results confirm a pattern emerging across public company earnings this year: prediction markets are showing up as a meaningful business line, not just a pilot program.

    Flutter Entertainment, parent company of FanDuel, also reported Q2 results this week. FanDuel CEO Jay Snowden acknowledged a "very aggressive, irrational, marketing spend advertising and new customer acquisition approach this football season" from the prediction market side. Both operators are signaling that the NFL season will be an expensive fight for market share.

    For consumers, the competition translates to better products and more aggressive promotions. For the industry, the Q2 earnings cycle marks the moment prediction markets stopped being a theoretical threat and became a line item that Wall Street—and C-suite executives—have to actively account for.

    DraftKings stock fell approximately 4% in after-hours trading Thursday following the earnings release, and shares remain down roughly 36% year-to-date. But Robins' posture was not that of a company managing a crisis—it was that of one making a deliberate bet on where the industry is heading.

    The NFL season will tell us how good that bet turns out to be.

    Frequently Asked Questions

    Is DraftKings Predictions available in my state? DraftKings Predictions is currently live in 48 states, all except Maine and New Hampshire. Sports event contracts—the prediction markets tied directly to game outcomes—are available in 18 states. You can check the current availability at draftkings.com.

    How does DraftKings Predictions work? DraftKings Predictions allows users to trade event contracts—binary outcomes on sports games, economic events, and other outcomes. Contracts pay $1 if the outcome occurs and $0 if it doesn't. DraftKings operates its own exchange (DKeX), so the company acts as the platform facilitating trades between users, not a bookmaker setting odds.

    What fees does DraftKings Predictions charge? DraftKings charges $0.01 per contract per side as a platform fee, as disclosed in its official fee schedule. This is separate from any spread built into contract prices.

    How does DraftKings Predictions compare to Kalshi? Both operate on CFTC-regulated infrastructure, but with different structures. Kalshi is a designated contract market (DCM) that designs and lists its own contracts. DraftKings Predictions operates as an FCM through its own DKeX exchange, allowing it to route trades across multiple DCMs. Kalshi focuses heavily on event contracts across sports, economics, and politics; DraftKings Predictions skews toward sports event contracts, combos, and categories that align with its existing sportsbook user base.

    Will prediction markets hurt DraftKings' sportsbook business? According to DraftKings' own internal analysis, shared on the Q2 earnings call, the customer overlap between its sportsbook and the prediction market category is approximately 1%. The company estimates that 80% to 90% of prediction market volume in sportsbook states comes from professional or institutional traders—not from migrating casual bettors.

    Conclusion

    DraftKings' Q2 2026 earnings report is the strongest public data point yet that prediction markets are a durable business, not a passing feature. Revenue declined on paper because bettors won big during the World Cup and NBA Finals. The underlying metrics—volume, customer acquisition, cost efficiency—point in one direction.

    The $11 billion annualized prediction market volume figure is the number to watch. If DraftKings can hold or grow that through the NFL season while managing its $200–$300 million investment, the company will have demonstrated that a major consumer gaming operator can compete in the CFTC-regulated exchange space that Kalshi pioneered.

    Whether it can "lead and win," as Robins promised, is a bet the market itself will price over the next four months.

    Explore live prediction market odds for upcoming NFL games and other events at PredictionMarkets.US.

    Sources & Verification

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