DraftKings, FanDuel Lean Into Prediction Markets

DraftKings and FanDuel used their Q1 2026 earnings calls to push prediction markets as a growth channel, reporting different levels of commitment and results across the sector.

DraftKings reported Q1 revenue of $1.646 billion, GAAP net income of $21.1 million and adjusted EBITDA of $167.9 million. The company said its digital margin widened to 10.2%, an increase of about 1,300 basis points year over year. DraftKings management reported that annualized consumer volume in predictions exceeded $1 billion in April and described market‑making as generating a positive return. Jason Robins told analysts: “Market‑making is already generating a positive return for us, making it one of the fastest to profitability business lines we’ve ever launched.” The company added it is targeting a top‑two or top‑three market‑maker position.

Flutter Entertainment, the owner of FanDuel, outlined a two‑track approach. FanDuel Predicts targets consumer acquisition in U.S. states where sports betting is not yet legal, while Flutter began market‑making on the CME Group in April and plans to expand market‑making services to other partners. Flutter cautioned that customer‑facing prediction products and market‑making could overlap, and said proprietary pricing should limit cannibalization. Flutter reported Q1 revenue of $4.304 billion and an adjusted EBITDA margin of 14.7%.

Brokerage and fintech firms reported rising activity in prediction contracts. Robinhood said event contracts drove a 320% year‑over‑year rise in its “other transaction revenue,” which totaled $147 million in the quarter, and reported 27.4 million funded accounts. Robinhood plans an exchange joint venture, Rothera, with Susquehanna. The CME noted that roughly 30% of volume on its prediction market with FanDuel has shifted to market‑based contracts such as equities, crypto and energy. Interactive Brokers removed sports event contracts from its ForecastEx platform this quarter.

Several operators said they are not prioritizing prediction markets. BetMGM described prediction platforms as a competitive headwind and reported Q1 net revenue of $696 million and adjusted EBITDA of $25 million, with a digital margin near 3.8%. Penn Entertainment did not pursue prediction markets in the quarter and pointed to the planned July 13 launch of legal sports betting in Alberta as a near‑term growth driver; Penn reported interactive revenue of $358.3 million.

Casino operators emphasized different customer channels. Caesars reported record Q1 revenue of $2.87 billion and said most acquisition comes through its Rewards database. Caesars Digital posted $374 million in revenue and $69 million in adjusted digital EBITDA, with digital margins at 18.4%. Tom Reeg commented that the Rewards‑driven acquisition model keeps the company insulated from higher marketing costs in prediction channels.

Smaller operators highlighted alternative strategies. Rush Street Interactive reported revenue of $370.4 million, up 41%, and a digital margin of 16.2%. The company reported North America average revenue per monthly unique payer of about $317 and said its casino‑first focus targets a different player profile. Richard Schwartz noted: “Prediction markets today are primarily benefiting from sports event contracts, which is not an area of high priority for us.”

Regulatory and product shifts continued to appear: exchanges and brokers reported prediction trading moving beyond sports outcomes into financial and macro event contracts. Public companies are monitoring how those shifts affect customer acquisition economics across online gaming and betting businesses.