DraftKings prediction market revenue nears sports betting levels

DraftKings' prediction market exchange DKeX is rapidly increasing its net revenue margins, even though it is only about six months old. According to a new report from Eilers & Krejcik Gaming analyst Brad Allen, as volume grows, the net revenue margins the exchange generates are approaching those of DraftKings Sportsbook, one of the company's core segments.

Allen notes that in October, DKeX generated annualized total trading volume of $56.8 billion and consumer volume of $10.1 billion. In this picture, total volume is about 5.6 times consumer volume. Of consumer volume, 7.3% converts into gross revenue through fees and market making, while after promotions are deducted, 6% of consumer volume converts into net revenue.

Allen compares this rate with the net revenue margin of the company's overall sports segment, which was 7.3% in the first half of 2026 and 6.7% in the first nine months of the year. Jason Robins, the company's co-founder and CEO, said at an industry event last month that DKeX had quickly risen to third place among prediction market exchanges.

Investors were worried about spending on prediction markets. When the company released its third quarter results, it said it expected adjusted EBITDA investment of between $650 million and $700 million for DraftKings Predictions. The stock fell on the news and then recovered some of its losses. According to Allen, in terms of the revenue they generate, prediction markets are not far from traditional sports betting levels. Clarity from the Supreme Court on the future of sports event contracts could be positive for the stock. In the worst case, the Supreme Court could invalidate sports derivatives, but this would mainly affect pure prediction market companies, not established sports betting operators such as DraftKings.