DraftKings fell 21.3% after cutting its 2026 profit outlook to pay for prediction markets. The bill is $650 million to $700 million
What the market is pricing
The stock fell $5.01 from Thursday's close of $23.52 on volume of about 69.9 million shares, nearly four times its average of 18.5 million, according to Twelve Data. The intraday low of $16.55 is now the 52-week low. Flutter, which owns FanDuel, slipped only 1.53%, which suggests the selling was about DraftKings' own plan rather than the whole sector.
| Close, Nov 6 | Price | Change | Volume | 52-week range |
|---|---|---|---|---|
| DraftKings (DKNG) | $18.51 | -21.30% | 69.88M | $16.55 to $36.98 |
| Flutter (FLUT) | $81.70 | -1.53% | 3.54M | $72.56 to $235.77 |
At $18.51 the stock is about half its 52-week high of $36.98. Prices are Friday's closing quotes, read at 14:50 UTC on November 7; markets reopen on Monday.
What DraftKings reported
Third-quarter revenue rose 16% to $1.329 billion from $1.144 billion, short of the roughly $1.40 billion analysts expected, according to RG.org. The net loss widened to $468.7 million from $256.8 million, or 94 cents a share against an expected 39 cents. Adjusted EBITDA was a loss of $316.9 million, and sales and marketing spending rose to $605.7 million from $360.4 million.
The core business still grew. Sports revenue rose 31.5% to $783.6 million and iGaming revenue rose 2.1% to $460.9 million. Monthly unique payers were about 4.1 million, up about 13%.
The price of Predictions
The guidance cut is the clearest number yet on what it costs a sportsbook to compete with Kalshi and Polymarket. DraftKings expects Predictions to consume $650 million to $700 million of adjusted EBITDA in 2026, including $175 million to $225 million in the fourth quarter. It launched its own exchange, DKeX, in June, and chief executive Jason Robins said more than 1.6 million customers have used Predictions this year.
PYMNTS reported that about 90% of the 2026 gap between gross and net Predictions revenue is new-customer incentives, and that the company expects this year's customers to repay their acquisition cost in about 20 months. Its base case assumes a Supreme Court ruling on sports event contracts around mid-2028.
The 2027 plan investors are being asked to believe
DraftKings guided 2027 revenue of $7.35 billion to $7.75 billion and adjusted EBITDA of $800 million to $1.0 billion. Predictions is expected to bring in $650 million to $750 million of revenue in 2027 while the investment falls to $250 million to $350 million. Friday's price suggests many shareholders want to see that turn before paying for it.
What to watch next
Three dates matter. The CFTC has given exchanges until about December 5 to stop geofencing states or explain why, the Supreme Court has not yet taken a Kalshi case, and DraftKings' fourth-quarter report will show whether Predictions spending stays inside the $175 million to $225 million range. The live Kalshi vs Polymarket odds page tracks the venues DraftKings is now competing with.
Method and limits
Stock prices are Twelve Data closing quotes for November 6, 2026, read at 14:50 UTC on November 7. Company figures come from DraftKings' third-quarter release as reported by RG.org and PYMNTS; the prior guidance range comes from PYMNTS. Adjusted EBITDA is a company measure, not a GAAP figure. Guidance is the company's own forecast and can change. Nothing here is a view on whether the stock is cheap or expensive.
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Frequently asked questions
Why did DraftKings stock drop?
DraftKings cut its 2026 adjusted EBITDA guidance to $175 million to $275 million, from $700 million to $900 million, mainly because its Predictions product will absorb $650 million to $700 million of adjusted EBITDA this year. Third-quarter revenue of $1.33 billion and a 94-cent loss per share also missed analyst estimates. The stock closed down 21.3% at $18.51 on November 6.
What is DraftKings Predictions?
It is DraftKings' prediction market business, which competes with Kalshi and Polymarket. DraftKings launched its own exchange, DKeX, in June 2026 and says more than 1.6 million customers have used Predictions this year.
When does DraftKings expect Predictions to pay off?
For 2027 the company guided Predictions revenue of $650 million to $750 million and a smaller investment of $250 million to $350 million of adjusted EBITDA. PYMNTS reported that management expects the 2026 customer cohort to repay its acquisition cost in about 20 months.
Sources
- RG.org, DraftKings Q3 2026 results, predictions guidance, shares fall, November 6, 2026
- PYMNTS, DraftKings stock plunges 20% as $700 million prediction markets bet tests investor patience, November 6, 2026
- Twelve Data, DKNG and FLUT quotes, close of November 6, 2026, read 14:50 UTC, November 7, 2026
- BetG8, The CFTC gave prediction markets 30 days to stop geofencing states, November 6, 2026
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