Forecast ranges and measurement
| Year | Investment ($ millions) |
|---|---|
| 2026 forecast | 650–700 |
| 2027 forecast | 250–350 |
Both graphics use the same zero-to-800 scale. Dark bars reach the lower end; pale extensions show the upper end. This company-defined adjusted EBITDA investment is a profit impact, not a cash expenditure forecast or reported net loss. Factual data redrawn; no issuer artwork reproduced.
DraftKings has attracted more than 1.6 million prediction-market customers this year. But it expects promotions to offset most of the gross revenue, leaving investors funding growth that has yet to add meaningful sales. [1]
The Nasdaq-listed sports-betting company (DKNG) said on November 5 that heavier Predictions investment was squeezing its 2026 profit outlook. Its pitch is that those customers will generate much more revenue next year. [1]
A new route to sports fans
Predictions lets eligible customers trade contracts tied to real-world outcomes, including sports and finance. When DraftKings launched the separate app in December 2025, its sports contracts reached markets including California and Texas. That gave it another route to customers beyond its conventional sportsbook footprint. Those were launch arrangements, not a promise of unrestricted availability today. [3]
The business has since grown beyond sending customers to somebody else's exchange. Its latest quarterly filing says DraftKings now operates a customer brokerage, the DKeX exchange and a market-making business that trades to supply buyers and sellers. Revenue can come from customer transaction fees, exchange fees and trading activity. Owning more of that chain gives it more ways to earn from the same customer. [2]
The cost of getting people to try it
That expansion needs marketing. Company-wide sales and marketing expense rose 68% from a year earlier to $605.7 million in the September quarter. DraftKings links the increase to Predictions, its Super App, World Cup customer acquisition and new markets. It does not attribute the entire increase to Predictions. Its reported quarterly net loss widened to $468.7 million from $256.8 million. [2]
“new customer promotions will offset the lion’s share of gross revenue generated.”
DraftKings, November 5, 2026 earnings release [1]
For 2027, DraftKings forecasts $650 million–$750 million of Predictions revenue, alongside a $250 million–$350 million reduction to adjusted EBITDA. That profit measure excludes expenses including stock compensation, interest and taxes. Even with substantial revenue, the new business would still weigh on profit. [1]
The rulebook is still being argued over
The legal backdrop adds another risk. The Commodity Futures Trading Commission, the federal derivatives regulator, proposed in October to explicitly include sports and other event contracts in its definition of a swap, a financial contract under its oversight. Its notice describes conflicting federal court interpretations and state claims that sports contracts fall under gaming laws. Comments are due November 18. This remains a proposal; it does not settle those disputes. [4]
Restrictions could limit the customer base just as DraftKings spends to build it. Continued competition could also keep promotions expensive. Both pressures make the timing of a profitable expansion uncertain.
The market connection DKNG is trying to turn an audience it knows into a larger trading business. The unresolved test is whether customers keep returning when the introductory incentives fade.