DraftKings’ Prediction-Market Ranking Is Not Entirely ‘Clear’
DraftKings trimmed its revenue guidance for the rest of 2026 in its third-quarter earnings report released Thursday afternoon, causing its stock to fall by about 28% to $16.91 per share in the first two hours after the market opened Friday morning.
Its new fiscal year 2026 revenue guidance range is $6.35 billion to $6.55 billion, down from a previous estimate of $6.5 billion to $6.9 billion. The company also projected $7.35 billion to $7.75 billion in revenue next year, slightly worse than analyst expectations.
DraftKings, best known for its traditional sportsbook and online casino games, said it’s making progress building a competitive prediction market product, as competitors Kalshi and Polymarket continue to soar. The Jason Robins-led company said in a press release and earnings presentation it now owns the “clear” third-place prediction market exchange in the U.S.
But the pecking order depends on which measurement is being used.
DraftKings’ statement refers to notional volume, the prediction market industry’s often misunderstood default metric. By notional volume, DraftKings has indeed improved from a U.S. market share of about 0.01% during the World Cup to near 3.6% in October, which is good enough to rank No. 3 among CFTC-regulated exchanges by a full percentage point.
Yet elsewhere in its third-quarter earnings presentation, DraftKings disclosed that in October, retail users on DKeX accounted for just $840 million of the exchange’s roughly $4.7 billion in notional volume (or about 18%). The company did not report how much volume its prediction market app is brokering for third-party exchanges, which wouldn’t be reflected in DKeX’s notional volume numbers.
This fits with what Sportico has reported in prior data analyses: Contrary to how operators track performance for other forms of betting like traditional sportsbooks, prediction market notional volume does not come close to representing the amount of money retail users are risking. The metric assigns a flat $1 value to every prediction market contract purchased, regardless of how much of that $1 was wagered by an in-app retail user compared with an institutional market maker on the other side (DraftKings does not allow retail users to place limit orders). For example, DraftKings can tally both a $0.60 bet on a favorite and a $0.01 wager on a long shot as $1 in notional volume.
More than half of DraftKings’ prediction market notional volume comes from long-shot parlays, whereas on the opposite end of the spectrum, none of Robinhood-affiliated Rothera’s volume comes from parlays. This underlines why notional volume is an imprecise reference point for comparisons between entities.
DraftKings’ notional volume also incorporates activity from its own affiliated market maker, essentially using its own spending to help make the case it is surging past competitors. Some exchanges do not use affiliated market makers.
When measuring the actual dollars risked on prediction markets, DraftKings’ prediction market exchange ranked No. 5 in October below Kalshi, Polymarket U.S., Novig and OG Prediction Markets, according to Aldrin Research.
Three months ago, Robins said DraftKings could “win” prediction markets “this NFL season and beyond.”
When reached for comment, a DraftKings spokesperson emphasized the exchange is still in its early growth stage and said the company is well-positioned to handle any direction the prediction market industry goes, whether it’s permanently being able to offer sports bets or losing those types of wagers in a U.S. Supreme Court decision.
Source: www.sportico.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.