DraftKings Cuts 2026 Profit Outlook to Fund Prediction Markets Push
Published: November 7, 2026 | Author: Roxy Vance
DraftKings cut its 2026 Adjusted EBITDA forecast by as much as $625 million as it spends heavily to grow its Predictions business, even as third-quarter revenue rose 16% to $1.33 billion. The Boston-based sportsbook and online casino operator reported the results on November 5, 2026, three months after it had kept its full-year guidance unchanged.
A Lower Forecast for 2026
DraftKings now expects 2026 Adjusted EBITDA of $175 million to $275 million, down from the $700 million to $900 million it maintained on August 6. It lowered its 2026 revenue range to $6.35 billion to $6.55 billion, from $6.5 billion to $6.9 billion. The main reason is $650 million to $700 million of planned Adjusted EBITDA investment in Predictions this year, including $175 million to $225 million in the fourth quarter.
The company said Predictions revenue will be immaterial in 2026, because promotions for new customers will offset most of the gross revenue. For 2027, it expects Predictions revenue of $650 million to $750 million, total revenue of $7.35 billion to $7.75 billion and Adjusted EBITDA of $800 million to $1.0 billion.
“Our core business continues to generate significant free cash flow, which we are deploying to fund growth in our Predictions business at attractive payback periods,” said Alan Ellingson, DraftKings’ chief financial officer.
The Quarter
Revenue for the three months to September 30 was $1.33 billion, up from $1.14 billion, driven mainly by customer engagement and a higher sportsbook margin. The net loss widened to $468.7 million from $256.8 million, and Adjusted EBITDA was a loss of $316.9 million, against a loss of $126.5 million a year earlier. Sales and marketing spending rose to $605.7 million from $360.4 million.
Monthly unique payers rose about 13% to 4.1 million. Chief executive Jason Robins said more than 1.6 million customers have engaged with Predictions so far this year.
Online Casino Growth Slows
Sports revenue, which includes online and retail sportsbook and prediction markets, rose 31.5% to $783.6 million. iGaming revenue grew 2.1% to $460.9 million in the quarter, and 6.1% over nine months. DraftKings’ online casino is live in five states covering about 11% of the US population, while its sports betting reaches 27 states, Washington, D.C., and Puerto Rico.
The company said its outlook for the core business reflects a decision to invest further in iGaming growth. Our guide to online casinos covers the options in regulated markets.
Context
DraftKings is not the only major operator to lower its outlook this week: FanDuel owner Flutter cut its 2026 guidance on November 4. Prediction markets also face legal challenges from states; Arkansas sued Kalshi the same day.
“The third quarter marked a pivotal moment for DraftKings, as the Predictions offering we have been building is now powering meaningful growth for our business,” Robins said.
