DraftKings bets $1bn predictions survive a Supreme Court ban
Wall Street punished DraftKings after it hiked prediction-market spend & the CFTC moved to curb state geofencing.
The hit
DraftKings shares fell by as much as a record 29% on Friday after the company revealed it will spend up to $700m on prediction markets this year, up from a planned $300m, according to InGame. Boss Jason Robins told the earnings call he’s confident the spend pays back.
Why it matters
DraftKings is betting customers acquired now via its DKeX exchange keep paying off even if the Supreme Court later bans sports prediction contracts. The CFTC has also just ordered platforms to stop geofencing states or explain why not. Robins said he wouldn’t ‘make anything of’ the CFTC statement, adding DraftKings has ‘a really good relationship’ with the regulator. Wall Street appears to have doubts, with Citizens analyst Jordan Bender saying the spending went ‘beyond even the worst-case scenario’.
The record
| Share price fall | As much as 29% to $16.60, more than the drop on 12 March 2020 |
|---|---|
| Market value lost | $3bn wiped off, leaving DraftKings worth $8.4bn |
| 2026 prediction-market spend | $650m-$700m |
| 2026 adjusted EBITDA guidance cut | To $175m-$275m, down from $700m-$900m |
| Net loss, Q3 | $468.7m, with sales & marketing up more than 68% to $605.6m |
What happens next
Robins expects a Supreme Court ruling on sports event contracts around mid-2028.
Sources: DraftKings: $1B Predictions Spend Worth It Even If Sports Banned
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