The company cut 2026 EBITDA guidance to $175m-$275m from $700m-$900m as Predictions spending bites.
The hit
DraftKings shares plunged nearly 30% after third-quarter earnings on Thursday & an investor call Friday, according to PYMNTS. Management slashed 2026 profit guidance & revealed plans to spend up to $700m building its Predictions business. Quarterly revenue hit $1.33bn, up 16% year over year but below analyst expectations of roughly $1.4bn.
Why it matters
Investors are pricing in the risk that DraftKings is pouring hundreds of millions into customers it may lose if regulators or courts ban sports prediction contracts. CEO Jason Robins said planning assumes a Supreme Court ruling around mid-2028, but even that timeline is unconfirmed. Wall Street is now weighing customer growth against the profit it actually produces.
The record
| 2026 EBITDA guidance cut | $175m-$275m, down from $700m-$900m (DraftKings) |
|---|---|
| Predictions spend this year | $650m-$700m of adjusted EBITDA consumed (DraftKings) |
| Customer acquisition gap | 90% of gross-to-net revenue gap tied to new-customer incentives (CEO Jason Robins) |
| 2027 Predictions revenue forecast | $650m-$750m, with roughly $500m gross profit (DraftKings) |
| Combined take rate | 11.1% across brokerage, DKeX exchange & market-making in Sept-Oct (DraftKings) |
What happens next
Watch whether Predictions hits its projected 2027 revenue target while cutting acquisition spending, & how a possible Supreme Court ruling on sports prediction contracts plays out.
Sources: DraftKings’ expensive bet on prediction markets is crushing its stock
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