As company executives stressed to investors during a second-quarter 2026 earnings call Friday (Aug. 7), prediction markets are becoming central to that ambition.
“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,” DraftKings Co-Founder and CEO Jason Robins said in a Friday press release. “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.”
DraftKings generated $115 million in adjusted EBITDA for the second quarter, while customer-friendly sports outcomes created an approximately $80 million revenue headwind. Management nevertheless maintained its full-year revenue guidance of $6.5 billion to $6.9 billion and adjusted EBITDA guidance of $700 million to $900 million. Its core business remains on track to generate roughly $1 billion in adjusted EBITDA this year.
See also: How Uncertainty Became the Engagement Engine of the Digital Economy
DraftKings Is Turning the Sportsbook Into a Super App
DraftKings said customer acquisition increased nearly 75% year over year during the second quarter, helped by the NBA Finals and World Cup. The company acquired roughly 30% more customers than expected while spending only about 10% more than planned, with acquisition costs coming in approximately 25% better than anticipated.
Some of those customers are coming from markets DraftKings historically could not reach through regulated sports betting. Its prediction product is now available nationally through the broader DraftKings Sports app. More than 600,000 customers have used predictions this year, and management said adoption has exceeded expectations. Annualized trading volume increased from $2.3 billion to $11 billion between April and July.
That changes the geographic logic of DraftKings’ business. Instead of waiting for large states such as California and Texas to legalize online sports betting, DraftKings can establish customer relationships there through prediction markets today. Robins said consumers in states without legal sportsbooks are showing profiles similar to sportsbook customers elsewhere.
Management said it sees only about 1% customer overlap between its sportsbook users and customers of the largest prediction market operator in states where online sports betting is already legal. DraftKings also estimates that 80% to 90% of prediction market volume in those jurisdictions comes from professional syndicates and institutional-style traders who were largely not sportsbook customers in the first place.
Early customer economics are reinforcing the thesis. DraftKings said prediction customers are being acquired for materially less than sportsbook customers while showing comparable early retention and volume characteristics. More than half have used “combos,” the prediction market equivalent of packaging multiple outcomes together, and the feature is approaching 20% of prediction volume.
Read also: DraftKings Brings $11 Billion Prediction Market Into Flagship App
Owning More of the Gaming Economics Comes Down to Infrastructure, Not Acquisition
DraftKings now operates across three layers of the prediction market stack, including brokerage, exchange and market making. Management said owning those functions allows it to capture economics that would otherwise flow to third parties while giving the company greater control over products, pricing and customer experience.
The company plans to move much of its major sports prediction volume onto its own exchange, DKeX, beginning around the college football and NFL seasons. As more activity moves internally, management said it expects unit economics to improve, potentially creating a multiyear margin tailwind.
The sportsbook remains the engine. DraftKings is now trying to build an ecosystem around it.
The PYMNTS Intelligence report “Banking Both Sides: Instant Payouts Turn Receivers Into Customers” found that gig, creator and marketplace platforms are the most aggressive adopters of instant payouts in absolute terms, with nearly one-third of senders offering instant payouts always or most of the time.
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