DraftKings forecasts $650M–$750M in 2027 Predictions revenue as combos grow

DraftKings forecasts $650 million to $750 million in revenue from Predictions in 2027. The company expects the business to contribute little reported revenue in 2026 because promotions for new customers will offset most of its gross revenue. In its 5 November earnings release, DraftKings estimated that investment in Predictions would reduce adjusted EBITDA by $650 million to $700 million this year and by $250 million to $350 million in 2027. Q3 earnings release

The accompanying shareholder letter shows how customers are using the product. Combos, which let customers combine multiple outcomes in one trade, accounted for 27% of consumer volume in October. DraftKings says more than 70% of its Predictions customers traded a combo that month. Q3 shareholder letter

DraftKings captures revenue at several points in a trade

DraftKings owns the brokerage, the exchange and a market maker. On trades on its DKeX exchange in September and October, the company reported a gross take rate of about 11.1% across all three activities. DraftKings says it captured roughly two-thirds of that gross revenue. Outside market makers captured the rest. The reported rate pools gross revenue from several activities, so it cannot be read as the fee a customer pays to trade. Q3 shareholder letter

The letter puts October consumer volume at an annualised $10.1 billion and total traded volume at an annualised $56.8 billion. Both figures extrapolate October activity to a full year. Consumer volume is the more relevant figure for tracking customer trading. The broader total answers a different question about trading activity on the exchange. Q3 shareholder letter

The forecast depends on keeping customers after promotions

CEO Jason Robins said more than 1.6 million customers had engaged with Predictions in 2026 as of the earnings release. The company describes retention among newly acquired Predictions customers as in line with its sportsbook and estimates a payback period of about 20 months for its 2026 cohort. The release and letter do not provide a numerical retention rate for that cohort or a separate figure for actual Q3 Predictions net revenue. Q3 earnings release · Q3 shareholder letter

Owning the exchange and a market maker gives DraftKings more ways to earn from each trade. The test for the 2027 forecast is how often customers return once their initial incentives run out, and how much of the revenue from those trades DraftKings keeps after promotions.

Related: FanDuel Predicts’ Q3 trading volume and market-making plans.