DraftKings and FanDuel are taking sharply different approaches to prediction markets despite both companies reporting weak second-quarter earnings in early August 2026, signaling a strategic divergence in how the two dominant U.S. sportsbook operators view the emerging category.
DraftKings reported Q2 2026 revenue of $1.44 billion, down 5% year-over-year, with a net loss of $67.6 million compared to a $157.9 million profit in the same period last year. The company blamed a lower hold rate and unfavorable sports outcomes, including the New York Knicks’ NBA championship win. Meanwhile, FanDuel parent Flutter Entertainment cut its full-year 2026 revenue guidance by $395 million and adjusted EBITDA guidance by $210 million, citing a delayed NFL schedule and increased promotional spending in the U.S. market.
Both companies reported these disappointing results while simultaneously doubling down on prediction markets, but the scale and intent of their bets diverge fundamentally.
DraftKings’ Aggressive Prediction Market Bet
DraftKings CEO Jason Robins framed prediction markets with unmistakable ambition in the company’s earnings call, stating that a predictions customer “ought to have the same lifetime value as a sportsbook one” and declaring confidence that DraftKings can “win the category this NFL season and beyond.” The company is investing $200 million to $300 million in its prediction markets offering, funded by approximately $1 billion in core sportsbook earnings before interest, taxes, depreciation, and amortization.
To signal the centrality of this bet, DraftKings introduced a new metric combining sportsbook handle and prediction market volume into a single “Sports Consumer Volume” figure, collapsing the two products into one business unit. Q2 Sports Consumer Volume reached $13.1 billion, up 15% year-over-year. The company moved its exchange partnership from CME to Crypto.com to gain access to an expanded catalog and faster product deployment. On Super Bowl Sunday, DraftKings Predictions achieved the second-most downloads in its category and delivered three times its prior daily trading record.
DraftKings is treating prediction markets as a standalone business to dominate, not simply as an ancillary product. The company maintained full-year 2026 guidance of $6.5 billion to $6.9 billion in revenue and $700 million to $900 million in adjusted EBITDA, with management pointing to prediction market momentum as evidence the second half would deliver.
FanDuel’s Measured, Complementary Approach
Flutter’s framing of prediction markets throughout its earnings call was notably careful and cautious. FanDuel Predicts allows the company to acquire customers ahead of sports betting regulation in new states while generating incremental economics. Flutter expects its market-making operation to generate approximately $50 million in revenue in 2026, against category expenses expected to top $200 million—a gap that reflects a company viewing prediction markets as a customer acquisition channel rather than a standalone profit center.
CEO Peter Jackson (who announced his resignation, effective October 1, 2026) described prediction markets as “incremental to sports betting rather than cannibalising demand.” Flutter disclosed that cannibalization from prediction markets was low single digits and framed the category as incremental total addressable market. Unlike DraftKings, FanDuel has no plans to operate its own prediction market exchange. Instead, it will market-make on other platforms and integrate a unified app before the NFL season.
According to Susquehanna analyst Joe Stauff, FanDuel is roughly 9 to 12 months behind DraftKings in building out its prediction markets offering. The distinction is strategic: FanDuel moved all sports and novelty contracts from CME to Crypto.com while retaining CME for financial markets, a shift driven by CME’s minimal sports volume. During the first two weeks of July, CME’s actual sports volume was reportedly 0.02% of all volume from U.S. regulated entities.
The contrast between the two companies’ strategies highlights a fundamental disagreement about prediction markets’ role in the future of sports betting. DraftKings is betting it can outcompete independent platforms like Kalshi and Polymarket directly, leveraging its 30-million-user app and sportsbook customer base. FanDuel is betting there is a profitable role for a market-maker and distributor without owning the exchange, allowing it to avoid the regulatory and operational complexity of operating a designated contract market while maintaining focus on its core sportsbook business.
Both companies are entering the 2026 NFL season with prediction market products as a strategic priority, but the divergence in investment scale, operational structure, and stated objectives suggests two competing visions for how prediction markets will integrate into the U.S. sports betting industry.
Sources
- Sports Business Journal — DraftKings and FanDuel’s prediction market strategies and weak Q2 earnings, reporting on both companies’ diverging approaches
- Gaming America — Detailed analysis of DraftKings’ aggressive prediction market strategy versus FanDuel’s measured approach, including CEO quotes and financial metrics
- Yahoo Finance — DraftKings Q2 2026 earnings call summary and revenue/EBITDA figures
- Action Network — DraftKings Q2 2026 revenue and betting volume data
- PYMNTS — DraftKings’ prediction markets strategy and positioning as a growth engine
- iGaming Business — FanDuel’s cautious prediction markets rollout and 9-12 month lag behind DraftKings
- Barron’s — DraftKings prediction market trading volume and annualized consumer trading figures
- Financial Times — Analysis of prediction market valuations and competition from Kalshi and Polymarket
