DraftKings Predictions Tops $2.3B Annualized Volume Ahead of Railbird Launch, Parlay Rollout

DraftKings gave buyers its clearest look but at its prediction markets enterprise on Thursday. The firm’s Q1 earnings launch disclosed new quantity and customer-acquisition metrics and mentioned DraftKings expects to launch its proprietary prediction market alternate, Railbird, and start providing parlays (or “combos”) within the coming weeks.

The replace reveals that DraftKings is making an attempt to maneuver rapidly from solely distributing third-party occasion contracts towards a prediction market mannequin it controls extra straight. DraftKings Predictions launched in December and at the moment depends on contracts listed by exterior exchanges Crypto.com and CME Group.

CEO Jason Robins mentioned DraftKings Predictions is now reside in DraftKings’ flagship “Super App,” serving to lower the product’s buyer acquisition price by greater than 80% in April. Robins mentioned they’ve greater than doubled the quantity of markets obtainable to commerce, pushing Predictions quantity per buyer above sportsbook deal with per buyer. 

DraftKings didn’t present complete Q1 buying and selling quantity for Predictions, however mentioned April exercise pointed to a quicker begin in Q2. Annualized shopper quantity exceeded $1 billion in April, up 38% from March, whereas annualized complete buying and selling quantity topped $2.3 billion, up 43% from March.

“Predictions, particularly in sports activities, is a strategic precedence for DraftKings,” Robins mentioned in his opening remarks throughout Friday’s Q1 earnings name. “This class continues to be in its first inning, and we consider DraftKings is finest positioned to outline it. We are planning important funding within the coming months to enhance our providing, construct liquidity, and scale buyer acquisition. We intend to execute with urgency and set up a management place in sports activities predictions earlier than year-end.”

On Friday’s name, Robins additionally mentioned DraftKings expects market making to contain third-party prediction market platforms in addition to Railbird, calling it one of the quickest paths to profitability the corporate has ever launched.

Railbird Exchange to launch in Q2, give DK extra management

DK Predictions at the moment operates via GUS III LLC, DraftKings’ registered introducing dealer. That lets DraftKings onboard clients and route orders for federally regulated occasion contracts listed on exterior exchanges. Because GUS III isn’t but a futures fee service provider (FCM), DraftKings has relied on Wedbush Securities as the surface FCM for customer-account and clearing entry capabilities.

DraftKings’ Predictions roadmap factors to an “in-house FCM” in Q3, after the corporate utilized for FCM standing in February. If accredited, that would cut back DraftKings’ reliance on Wedbush and provides the corporate extra direct management over the customer-account aspect of DK Predictions.

Railbird would handle DraftKings’ reliance on exterior exchanges for the contracts DK Predictions presents. DraftKings acquired the CFTC-regulated designated contract market (DCM) final yr, and launching it in Q2 would enable DraftKings to listing its personal occasion contracts as an alternative of counting on third-party exchanges. That might give DraftKings extra management over the markets it presents, how contracts are structured, how liquidity is supported and the way a lot income it retains from prediction-market buying and selling.

Recent regulatory filings additionally present Railbird could also be transferring nearer to a extra energetic position in DraftKings’ prediction market technique. 

A revised Railbird rulebook dated May 14 lays out how corporations and clients can entry the alternate, how trades will probably be executed and cleared, and the way market makers can assist present liquidity. Railbird additionally filed FCM and self-clearing member agreements set to take impact May 13 and a market-maker program set to take effect May 14, with supplies saying this system is scheduled to start June 1. The market-maker submitting additionally says that Railbird’s “doing enterprise as” identify is DKeX.

CFTC employees additionally not too long ago cleared a regulatory path for Railbird to make use of Bitnomial as its clearinghouse. In a May 4 notice, the company mentioned employees wouldn’t suggest enforcement in opposition to Railbird, Bitnomial or their contributors for sure swap reporting and recordkeeping necessities tied to totally collateralized occasion contracts traded on Railbird and cleared via Bitnomial. 

The clearing change is notable as a result of the sooner Railbird setup concerned QC Clearing, the clearinghouse tied to QCEX, which Polymarket acquired final yr as half of the U.S. regulatory technique for its Polymarket US app.

DraftKings says Predictions can develop sports activities attain

The prediction market updates got here alongside stronger first-quarter outcomes general. DraftKings reported $1.65 billion in income, up 17% from the identical quarter final yr, and $168 million in adjusted EBITDA, up 64%. The firm mentioned adjusted EBITDA would have topped $200 million with out its funding in Predictions and the launch of sportsbook operations in Arkansas.

Robins additionally mentioned prediction-market spending is anticipated to be within the $200-$300 million vary, with a lot of that funding coming within the again half of the yr. That provides context to DraftKings’ unchanged full-year steerage. The firm is signaling stronger core profitability, but in addition a heavier funding cycle because it tries to scale Predictions, Railbird, market making and parlays earlier than the tip of the yr.

DraftKings additionally pushed again on the concept prediction markets are meaningfully hurting its sportsbook enterprise. Robins mentioned the corporate continues to see “no discernible impression” from Predictions by itself sportsbook, whereas inner and third-party information recommend prediction markets are having solely a slight impact on business sportsbook deal with, principally amongst low-margin wagers.

The firm’s Q1 presentation framed Predictions as an enlargement of DraftKings’ sports activities attain. Beginning subsequent quarter, DraftKings mentioned it should report a mixed sports activities income line that can embrace each the sportsbook and sports activities occasion contracts. DraftKings mentioned that its mixed sports activities enterprise might attain greater than 95% of the U.S. inhabitants by the tip of 2026.

DraftKings additionally cited Eilers & Krejcik information displaying that just about 70% of sports activities prediction market shopper quantity comes from states with out authorized sportsbook entry. In absolutely aggressive sportsbook states, the corporate mentioned regulated sportsbook operators nonetheless account for 98% of sports activities betting quantity, in contrast with 2% for the main prediction market operator, Kalshi.

During Friday’s name, Robins additionally mentioned that prediction markets might strain states to revisit sports activities betting legalization. He mentioned that states with out authorized sportsbook entry should still see prediction markets function inside their borders, however with out the identical state-level tax income that regulated on-line sports activities betting would generate, maybe resulting in a legislative push.

Market making turns into a much bigger half of DraftKings’ prediction market plan

DraftKings’ market-making technique additionally got here into sharper give attention to the decision, with Robins saying the corporate expects to take part on third-party prediction market platforms along with its personal alternate.

Robins mentioned DraftKings stood up its market-making operation within the final couple of months and is already making a living from it.

“So far so good, we’re making a living,” Robins mentioned. “It’s one of our quickest to profitability enterprise traces we’ve ever launched.”

Robins mentioned DraftKings’ market making will focus by itself alternate, however added that the corporate sees worth in taking part throughout a number of platforms, each to extend quantity and to handle danger throughout extra venues.

“I do suppose (market making) will contain being on third-party platforms,” Robins mentioned. “We will clearly give attention to our personal alternate (Railbird) as nicely, which is launching within the coming weeks and we’re enthusiastic about that.”

DraftKings and FanDuel race towards identical prediction market playbook

DraftKings’ replace got here two days after Flutter reinforced a similar prediction market push at FanDuel, giving the 2 largest U.S. on-line sportsbook operators parallel methods as sports activities occasion contracts transfer nearer to the middle of the business.

The similarities have gotten clearer. Both corporations are making ready heavier prediction market spending within the second half of 2026, with DraftKings pointing to a $200-$300 million funding vary and Flutter holding a roughly $300 million funding plan tied to FanDuel Predicts. Both are constructing round main sports activities occasions just like the World Cup and upcoming NFL season and each are transferring into market making as a option to drive up prediction market income.

FanDuel Predicts and DraftKings Predictions launched inside weeks of one another late final yr and are being folded into every firm’s fundamental app expertise. Flutter mentioned FanDuel’s “One App” routes clients to sportsbook merchandise in authorized betting states and prediction markets the place on-line sports activities betting isn’t obtainable. DraftKings mentioned Predictions is now reside inside its flagship app, serving to cut back buyer acquisition prices.

The early monetary image seems extra favorable for DraftKings. Flutter mentioned FanDuel Predicts produced immaterial Q1 income, whereas DraftKings didn’t disclose standalone Predictions income however reported April annualized complete buying and selling quantity above $2.3 billion and mentioned its market making enterprise is already worthwhile. 

Still, each corporations are telling buyers the identical primary story: Prediction markets are now not a defensive experiment, however a significant half of their sports activities technique forward of the World Cup and NFL season.

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