DraftKings Defends Its Prediction Market Strategy

Truist Securities analyst Barry Jonas addressed DraftKings' prediction market strategy in his note dated November 6. The analyst recalled that the company had announced an unexpected miss and a guidance cut the previous night.

DraftKings said its prediction market strategy is based on internal data and that it believes the strategy is justified even if possible regulatory outcomes are taken into account. According to Jonas, the market is likely not expecting returns from this area, while iGaming spending is rising.