DraftKings jumps 7% on record earnings as Robins teases prediction market launch

Before DraftKings CEO Jason Robins addressed analysts on Thursday’s quarterly earnings call, the operator hours earlier teased a potential launch of a prediction markets offering in a letter released to shareholders.

While DraftKings is closely monitoring regulatory scrutiny of the rapidly growing product, the company stopped short of confirming that it will launch a prediction market before the end of the year. In Wednesday’s letter, Robins noted that DraftKings is “actively exploring ways” to enhance shareholder value through the product. Although Robins acknowledged the benefit of being an early mover in the new space, he believes it is less important to be the first major sportsbook to offer the product.

Last month, reports surfaced that DraftKings had engaged in discussions with prediction market Railbird Exchange on a potential acquisition. Founded in 2021 by financial analysts Miles Saffran and Edward Tian, Railbird received a designated contract market from the CFTC in June.

DraftKings shares spiked in after-hours trading on Wednesday, meanwhile, as the company reported record results in multiple categories.

‘Monitor mode’ on prediction markets

It didn’t come as a major surprise that DraftKings discussed prediction markets from the outset of Thursday morning’s call. Kalshi, which began offering political election event contracts on last year, has seen hundreds of millions in trading volume on sports in 2025.

In an ongoing legal battle, Kalshi has taken the position that federal regulations of prediction markets preempt those on the state level, although state regulators disagree. In recent months, more than three dozen state attorneys general signed an amicus brief in support of New Jersey’s litigation against Kalshi on the legality of derivative products on sports.

Within two minutes of his prepared remarks, Robins indicated that DraftKings will continue to monitor events surrounding prediction markets. The DraftKings CEO subsequently received a barrage of questions on the topic from analysts on the call. For now, Robins believes it is too early to tell whether DraftKings will own a proprietary tech stack for a possible prediction market offering.

Event contracts on sports mirror financial derivatives on commodities such as oil and corn futures, with a buy-sell mechanism on an exchange. Robins also fielded questions on the cross-sell between customers who bet on sports and those who trade the sports contracts.

As with most aspects of the topic, Robins said that DraftKings plans to take a “measured approach” before considering its next steps. DraftKings stated that it has not included a possible prediction markets launch for its fiscal year 2025 full-year guidance.

Two other industry executives, BetMGM CEO Adam Greenblatt and Penn Entertainment CEO Jay Snowden, have indicated that their ventures do not plan to be first movers with a prediction market launch. On Penn’s call Thursday, Snowden noted that Penn will consider the move if the right opportunity presents itself. He said the company would monitor the wave of litigation in state courts before considering the next steps.

Mixed financial results

For the three-month period ended 30 June, DraftKings generated revenue of $1.51 billion, up 37% from the year-ago quarter. DraftKings slightly beat analysts’ estimates of $1.43 billion. Over the quarter, DraftKings reported sportsbook handle of $11.5 billion, an increase of 6% from the second quarter of 2024.

The company also reported adjusted EBITDA of $300.6 million, more than doubling the total of $127.9 million in the same quarter last year. DraftKings set company records in the category. Still, the company reported adjusted EBITDA of $0.38 per share, slightly missing analysts’ per-share expectations of $0.42.

DraftKings is maintaining its fiscal year 2025 revenue guidance between $6.2 billion and $6.4 billion. At the same time, the company maintained its previous adjusted EBITDA guidance in the range of $800 million to $900 million.

One analyst noted Thursday that DraftKings offered 2026 full-year adjusted EBITDA of $1.4 billion during a business update two years ago. Robins responded that tax hikes in several states have impacted the guidance.

Other highlights from DraftKings’ Q2 earnings

• DraftKings’ metric known as “monthly unique payers” (MUPs) increased to 3.3 million average monthly unique paying customers in the second quarter of 2025, representing an increase of 6% compared to last year’s second quarter.
• Another metric with the abbreviation “ARPMUPS” came in at $151, representing a 29.1% increase compared to the same period in 2024. The abbreviation stands for “average revenue per monthly unique player”.
• During the first half of the year, DraftKings repurchased 6.5 million shares, the company wrote in a press release. In 2024, the DraftKings’ board authorised a share repurchase plan of up to $1 billion of the company’s Class A common stock.
• “We remain focused on investing in key growth initiatives across the organization to maximize shareholder returns over the long-term,” DraftKings CFO Alan Ellingson said. The buyback figure has been questioned by some analysts.
• At $233.2 million for the three-month period, sales and marketing expenses for DraftKings are still comparatively high relative to the rest of the industry. DraftKings reported category expenses of $215.7 million in the year-ago quarter. Over the last five years, expenses in the category have typically exceeded $100 million per quarter.

Comparisons with FanDuel

On a busy day for earnings reports across the industry, DraftKings held its quarterly call hours before one from archrival Flutter. Last month, FanDuel received a $31 billion valuation after Flutter acquired a 5% stake in the operator from Boyd Gaming.

At the time, Citi wrote that DraftKings’ enterprise value multiple traded at a 7% discount to FanDuel’s implied valuation based on the 10 July closing price.

While DraftKings closed that session at $44.57 a share, Citi reiterated a $58 price target.

DraftKings credited a period of favourable sports outcomes for adding about $110 million to company revenue over the final two months of the quarter.

In the first quarter, the company blamed a period of “customer-friendly” results for a negative impact of $170 million on quarterly revenue. During that period, DraftKings said, favourites in the NCAA Division I Men’s Basketball Tournament covered at the highest rate in the history of March Madness.

DraftKings’ sportsbook hold exceeded 11.5% on the quarter, as its parlay mix increased 430 basis points year-over-year. DraftKings reported a hold of 9.5% for the first three months of the year. Robins also appeared pleased with the company’s progress with in-game betting, noting that DraftKings now covers more than 90% availability for live markets in the NBA and MLB.

In a Form 10-Q filing with the SEC, DraftKings wrote that there has not been any significant changes in the company’s exposure to market risk over the first six months of 2025.

Stock moves

As of 10am ET Thursday, DraftKings traded around $46 a share, up 1.7% on the session. The company jumped approximately 7% in after-hours trading on Wednesday after it released earnings.

DraftKings is up about 50% since US President Donald Trump’s Liberation Day tariff announcement in April.

DraftKings has had a rocky year on equity markets, hitting a 12-month high of $53 a share in February, months after dipping below a share price of $30 last August.

 Though DraftKings is considering a move into offering prediction markets, the company did not confirm a 2025 debut.