DraftKings’ 2026 profit at risk from $100m prediction market spend

Jefferies still rates DraftKings a Buy, betting on regulatory action against prediction markets by summer 2027.

The hit

DraftKings now runs the third-largest US prediction market exchange by volume, with weekly trading above $700m. But that growth has a cost: Jefferies has cut its 2026 adjusted earnings forecast for DraftKings by 15%, citing an extra $100m in prediction market spending & slowing iGaming growth.

Why it matters

Jefferies keeps its Buy rating, betting that regulatory action against prediction markets, possibly by summer 2027, could provide the strongest support for DraftKings’ shares. The broker’s forecast cut shows prediction markets are already weighing on a listed sportsbook’s near-term profitability.

The record

2026 adjusted earnings forecast	cut to $577m from $678m
Extra prediction market spend	expected in H2 2026, above $200m-$300m guidance
Q3 revenue forecast	cut to $1.37bn from $1.397bn
US sports betting share	DraftKings 31.8% vs FanDuel 31.5% in partial Q3 state data
iGaming growth	slowed to 5.4% in Q2, est. 6.9% in Q3
Price target	$44, Buy rating maintained

What happens next

Jefferies flags further US iGaming legalisation as another potential catalyst for DraftKings’ shares.

Sources: DraftKings faces earnings pressure as prediction market spending rises, Jefferies says

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