DraftKings revenue drops in 2026 second quarter
DraftKings on Thursday reported revenue of US$1.4 billion in the second quarter, a decrease of US$69 million, or 5%, year-over-year.
Sports consumer volume – the number of individual betting actions – increased to US$13.1 billion, a 15% increase compared to US$11.5 billion during 2025’s second quarter.
“We delivered a strong second quarter and enter the back half of the year with real momentum, as our core business grew across handle, users, and engagement,” DraftKings’ CEO and Co-Founder Jason Robins said in a statement. “Our Super App is now live nationwide, and predictions is already growing faster than we anticipated.”
DraftKings entered prediction markets in December.
“The similarity of predictions customer metrics to sportsbook customer metrics, our advantaged LTV position, and our playbook to innovate on a leading predictions offering all underpin our confidence that we can win the category this NFL season and beyond,” Robins said.
Monthly unique payers increased about 9% to 3.6 million in the second quarter, compared to last year. The company said this increase “reflects strong unique payer retention and new customer acquisition across our sportsbook offering and predictions offering, which launched in December.”
Average revenue per monthly unique payers decreased about 13%, or US$19, to US$132, “primarily due to customer-friendly sport outcomes and new customer promotions impacting revenue across our sportsbook offering and predictions offering.”
DraftKings is maintaining its fiscal year revenue guidance range of US$6.5 billion to US$6.9 billion, and fiscal year Adjusted EBITDA guidance range of US$700 million to US$900 million.
DraftKings closed at US$22.17 on the Nasdaq on Thursday, up $0.41, or 1.8%.
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The Backstory
Growth story meets a tougher quarter
DraftKings’ second-quarter revenue decline came after a run in which the company had been telling investors that scale, product expansion and improved sportsbook economics were pushing the business toward more durable profitability. The latest results complicate that narrative without fully reversing it: betting volume rose, monthly unique payers increased and management held its full-year outlook, but revenue fell as customer-friendly sports outcomes and promotional spending weighed on the top line.
That mix explains why the quarter is less a simple slowdown than a test of DraftKings’ operating model. The company has built its valuation case around converting rising handle and engagement into higher-margin revenue over time. When outcomes favor bettors or customer acquisition requires heavier incentives, that conversion can weaken, even if the underlying user base remains active. The second quarter therefore puts more pressure on DraftKings to show that its expanded product set, including predictions, can offset volatility in the core sportsbook.
A strong start raised expectations
The tougher second quarter followed a stronger opening to 2026. In May, DraftKings reported first-quarter revenue of US$1.64 billion, up 17%, citing efficient customer acquisition, healthy engagement and higher sportsbook net revenue margin. The company also reiterated 2026 guidance for revenue of US$6.5 billion to US$6.9 billion and adjusted EBITDA of US$700 million to US$900 million.
That first-quarter report set a high bar. Average revenue per monthly unique payer rose 21% to US$131, reflecting better sportsbook margin. Monthly unique payers fell 4% year-over-year to 4.2 million, but the company attributed the decline mainly to lower lottery users after its exit from Texas in 2025. Excluding lottery, DraftKings said monthly unique payers increased 2% on retention and acquisition across sportsbook and igaming.
Management also used the first quarter to sharpen its pitch around sports predictions. Chief Executive Jason Robins said profitability was “inflecting,” giving DraftKings the capacity to invest behind predictions, while Jefferies analyst David Katz wrote that predictions overshadowed an otherwise solid core quarter. The company said its market-making operations were already profitable, with a proprietary exchange expected in the second quarter and an in-house futures commission merchant planned for the third quarter. Those milestones gave investors a framework for judging whether DraftKings could expand beyond conventional sports wagering.
Volatility has been a recurring theme
DraftKings’ recent results show how quickly its financial trajectory can move with sports outcomes, product mix and acquisition costs. In the first quarter of 2025, the company posted revenue of US$1.409 billion, up 20%, supported by customer engagement, efficient acquisition, a higher structural sportsbook hold percentage and the Jackpocket acquisition. But management still trimmed 2025 revenue and adjusted EBITDA guidance, saying customer-friendly results in March prevented a more bullish update.
That quarter also highlighted the effect of Jackpocket, the lottery app DraftKings acquired in 2024. Monthly unique payers rose 28% to 4.3 million, but excluding Jackpocket, the increase was about 11%. Average revenue per monthly unique payer fell 5% because Jackpocket users generated less revenue than DraftKings’ preexisting sportsbook and casino customers. Excluding Jackpocket, average revenue per payer rose about 7%.
The acquisition, completed May 22, 2024, was part of DraftKings’ effort to widen its funnel and bring lottery customers into a broader digital gaming ecosystem. CDC Gaming reported that DraftKings had completed the Jackpocket acquisition, giving the company a new customer channel but also adding complexity to reported user and revenue metrics. The later Texas exit showed how regulatory and strategic shifts in lottery could affect comparisons, even when sportsbook and igaming trends were healthier.
ESPN deal and predictions broaden the platform
By the third quarter of 2025, DraftKings was positioning itself as a larger sports entertainment and wagering platform, not only a sportsbook operator. The company reported third-quarter revenue of US$1.14 billion, up 4% year-over-year, as customer engagement and structural sportsbook hold gains were partly offset by bettor-friendly outcomes.
On the same day, DraftKings announced an agreement to become ESPN’s official sportsbook and odds provider, effective Dec. 1. The deal gave DraftKings a prominent distribution and branding channel tied to one of the largest sports media platforms in the U.S. It also reinforced the company’s strategy of embedding wagering products more deeply into the sports viewing experience, where customer acquisition can be more efficient and engagement can be more frequent.
The third-quarter report also foreshadowed the strategic importance of predictions. Robins said DraftKings expected to launch DraftKings Predictions in the coming months and viewed it as a significant incremental opportunity. The company subsequently entered prediction markets in December, setting up the current debate over whether that category can become a meaningful revenue source during the NFL season and beyond.
Predictions matter because they could extend DraftKings’ addressable market, diversify activity beyond regulated sports betting states and create a product that resembles the sportsbook in customer behavior while operating through different market infrastructure. But the opportunity also carries regulatory, operational and reputational risk. DraftKings must prove it can scale the product, manage liquidity and maintain compliance while avoiding cannibalization or excessive promotional spending.
Igaming remains a major support beam
DraftKings’ sportsbook business attracts most of the public attention, but online casino remains central to the company’s economics. Igaming markets are fewer in number than sports betting markets, yet they often generate steadier revenue and higher margins. DraftKings is live with igaming in five states, representing about 11% of the U.S. population, leaving a large untapped market if more states legalize online casino.
The broader U.S. igaming market has continued to expand. In February 2025, the seven legal online casino states generated an estimated US$711 million in revenue, up from US$620.2 million a year earlier. Michigan, New Jersey and Pennsylvania each topped US$200 million for the month, while Connecticut generated US$51.9 million from its two online casino operators, DraftKings through Foxwoods and FanDuel through Mohegan Sun.
The December 2024 market snapshot was even stronger, with estimated igaming revenue of US$778.6 million across the seven states, compared with US$582.2 million in December 2023. Michigan, Pennsylvania, Connecticut and Delaware set monthly records, while New Jersey’s online casino market generated US$228 million. Those figures illustrate why DraftKings continues to emphasize cross-sell, retention and product breadth across sportsbook and casino.
For DraftKings, igaming provides a counterweight to sportsbook volatility. Sports betting revenue can swing with game results, promotional intensity and seasonality. Online casino, by contrast, tends to be more consistent month to month once customers are acquired. That makes the limited pace of igaming legalization a key constraint on long-term U.S. growth, even as existing states show strong demand.
The stakes heading into the NFL season
The current quarter arrives at an important moment for DraftKings. The company’s share price has reflected investor uncertainty about how much to credit growth in handle and customers when revenue can still be pressured by outcomes and promotions. Holding full-year guidance signals management confidence, but the market will look for evidence in the back half of 2026, especially during football season, when betting volumes and acquisition spending typically rise.
The core question is whether DraftKings can convert its expanded ecosystem into sustained earnings growth. The ESPN relationship offers distribution. Igaming offers margin support. Jackpocket and lottery have broadened the customer funnel, though not without noise in the metrics. Predictions offer a potentially large new category, but also the most execution risk.
Second-quarter results therefore sit at the intersection of DraftKings’ old and new businesses. The old business is still driven by handle, hold, promotions and sports outcomes. The new one depends on whether a super app model can deepen engagement across betting, casino, lottery and predictions. DraftKings has not abandoned its long-term targets, but the revenue drop shows that scale alone does not eliminate volatility. The next test is whether the company can turn rising activity into revenue growth while funding its push into predictions without sacrificing profitability.
