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DraftKings Cuts Guidance as Prediction Markets Grow

The sports-betting operator lowered its 2026 adjusted EBITDA outlook by more than $500mn as it increases spending on its prediction-market business.

Updated on Nov. 6, 2026 in Gambling

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DraftKings cut its 2026 adjusted EBITDA outlook to $175mn-$275mn from $700mn-$900mn as it increases spending on its prediction-market business. AI Illustration. Upload story photo >

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DraftKings lowered its 2026 adjusted EBITDA guidance to $175mn-$275mn, down from $700mn-$900mn, and its shares fell more than 20% in after-market trading. The company is raising spending on its prediction-market product, which it launched last December and expects to cost up to $700mn.

Why it matters

The cut signals that the cost of expanding into prediction markets is weighing heavily on profitability for a major U.S. sports-betting operator. Regulatory pressure is also rising, with the CFTC advising that prediction-market operators should end domestic geographic restrictions, while Ohio and Massachusetts have threatened to withdraw gambling licences.

DraftKings cut its 2026 adjusted EBITDA guidance by more than $500mn, from $700mn-$900mn to $175mn-$275mn, while its 2027 forecast of $800mn-$1bn falls below the roughly $1.1bn analysts expected per Bloomberg data. The guidance revision does not address how long the prediction-market spending will persist or when it is expected to turn profitable.

The players

DraftKings

DraftKings is a major U.S. sports-betting and online gaming company that has expanded into prediction markets with its own product launched in December 2025.

Kalshi

Kalshi is a U.S. prediction-market operator that recently raised $1bn at a $40bn valuation, making it a leading competitor in the segment.

The details

DraftKings said it is pouring more money into its prediction-market business, which offers binary wagers on sports results and other events with prices set by participant betting. The company does not offer these sports event contracts in states that permit online sports betting. It said prediction-market revenues in 2026 would be far outweighed by high marketing costs.

Timeline

  1. December 2025: DraftKings launched its prediction market.

  2. November 5, 2026: DraftKings released its revised 2026 guidance.

  3. November 6, 2026: DraftKings shares plunged in trading.

Market Landscape

The CFTC's advisory that prediction-market operators should end domestic geographic restrictions would open state-by-state limits that currently shape DraftKings' product footprint. The company's push comes as Kalshi's $40bn valuation signals intense competition for the same bettors.

For bettors in states with online sports betting, DraftKings' spending shift means its sports event contracts remain unavailable there, while prediction-market offerings are reachable only where state rules allow. Those in other states may see prediction-market products as the company's growth focus.

The takeaway

Investors and bettors should watch whether prediction-market spending converts into revenue as the cost of growth weighs on near-term earnings. The regulatory direction set by the CFTC advisory could reshape where these products can operate.

Further reading

For more on the sector, explore Gambling coverage across the U.S. market.

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