Customer acquisition at scale is no longer the name of the online sports betting game.
According to executives on DraftKings‘ Friday (May 8) first-quarter 2026 earnings call, competition now centers on infrastructure, data science and product integration.
CEO Jason Robins framed “sports predictions” as the company’s next strategic frontier. He described the category as a major adjacent opportunity capable of reshaping how consumers engage with live sports. Rather than treating prediction markets as a side business, DraftKings is building them directly into its flagship app — and building what Robins called a nationwide “super app” for sports engagement.
First-quarter 2026 revenue rose 17% year over year to $1.646 billion. Adjusted EBITDA climbed 64% to $168 million. DraftKings also posted its second consecutive quarter of positive net income, a milestone that would have seemed distant during the industry’s expansion phase.
But the most consequential message from management was not about profitability. It was about reinvention.
See also: DraftKings Sees Slower 2026 Growth Despite $10 Billion Prediction Market Opportunity
From Sportsbook to Exchange: DraftKings’ Next Identity
The deeper story inside DraftKings’ earnings is about corporate identity. For years, DraftKings operated as an insurgent growth company in a newly legalized market. Investors rewarded expansion above all else because the category still felt unfinished.
Today, DraftKings faces the consequences of market maturation. Most of the largest states likely to legalize sports betting already have. Customer acquisition costs are stabilizing. Competition among leading operators has shifted from a land-grab battle to a contest centered on retention, engagement and product differentiation.
For DraftKings, that means sports betting, prediction markets, fantasy contests, casino gaming, media integrations, payments and live-event engagement — all inside a single ecosystem.
The clearest signal of its ambitions lies in infrastructure. DraftKings is not simply adding prediction products to an existing sportsbook. It is building the mechanics of a financial exchange.
Annualized prediction consumer volume surpassed $1 billion in April. Total volume traded exceeded $2.3 billion. Customer acquisition costs for prediction products dropped more than 80% after integration into the main DraftKings app.
Management also disclosed that DraftKings has launched internal market-making operations and plans to introduce a proprietary exchange ahead of the World Cup. These capabilities mirror how modern financial marketplaces work: market makers provide liquidity, exchanges facilitate transactions and pricing models drive efficiency and profit.
Robins acknowledged as much on the call. Whether a product is structured “as a bet or a contract,” he said, the underlying drivers are the same: liquidity, pricing accuracy, customer trust and seamless execution.
See also: Prediction Markets Turn Uncertainty Into a Business Model
AI and Regulation Are Reshaping the Economics of Sports Betting
Executives also pointed to AI as a driver of internal operating leverage. According to CFO Alan Ellingson, some teams are now operating at two to three times prior-year productivity under what he called an “AI-first execution” model.
AI is not just cutting customer service costs or automating code. It is changing how fast product teams can iterate. In industries built on constant optimization — gaming, advertising, financial trading — speed can become a competitive advantage.
For DraftKings, faster iteration may prove especially important in prediction markets, where user behavior, liquidity and regulation are all shifting at once. The company expects to invest between $200 million and $300 million into prediction-related initiatives in 2026, covering marketing, technology and customer acquisition.
Prediction markets also occupy an unusual regulatory position. Unlike traditional sports betting, which requires state-by-state licensing, some prediction products may operate under federal frameworks that bypass certain state restrictions.
Robins argued that prediction markets are starting to shift conversations with lawmakers, particularly in states that have not legalized online sports betting. Federally accessible prediction products, he suggested, weaken the case for restrictive state policies while also creating pressure against higher taxes on regulated sportsbooks.
DraftKings therefore faces a careful balancing act. It must keep proving that its core sportsbook business can grow profitably while investing in entirely new categories that may define the next decade of digital wagering.
