DraftKings Highlights Parlays and Prediction Markets During Financial Discussion
** Published on: May 9, 2025, 13:18 UTC**
Last updated on: May 9, 2025, 13:18 UTC
Todd Shriber ** 👑 @etfgodfather READ MORE Financial Gaming Business Mergers and Acquisitions**
DraftKings (NASDAQ: DKNG) held its first-quarter financial report meeting earlier today, with parlays and prediction markets being hot topics.
Stock prices for the sportsbook operator increased in midday trading despite lowering the 2025 financial guidance. DraftKings is now predicting adjusted EBITDA of $800 million to $900 million on revenue of $6.2 billion to $6.4 billion, whereas the prior outlook was EBITDA of $900 million to $1 billion on sales of $6.3 billion to $6.6 billion [1]. The change was due to favorable outcomes for customers in the January-March period causing the adjustment [2].
CEO Jason Robins commented that, without the high rate of favorite wins during the NCAA Men's Tournament, the 2025 financial forecasts would have been raised [3]. History was made as all four number one seeds reached the final four, and three number two seeds, and one number three seed made it to the elite 8. In total, higher seeds won at an 82% rate, the highest in history [4].
Despite the tournament results being priced into DraftKings, the focus shifted towards the operator's increasing parlay opportunity [5]. CFO Alan Ellingson revealed that the 10.4% sportsbook hold in Q1 beat expectations due to a 370 basis point increase in parlay handle mix [1]. The boost in parlay handle mix indicates new customers are gradually adopting accumulator bets [2]. DraftKings has potential avenues to compensate for the current lack of NFL games on the schedule and the NBA season coming to an end. These two sports are high structural hold sports and prime for same-game parlays [1].
During the call, Robins discussed DraftKings' prediction markets interest. In March 2025, the company had submitted an application with the National Futures Association (NFA), hoping to enter the prediction markets sector [6]. However, DraftKings withdrew its application in April 2025, delaying its movement into this area [1][5]. Robins clarified that the expanding reach of derivatives exchanges offering sports event contracts is starting regulatory discussions [1]. The state's position, whether they want to legalize it or observe it unfold in other areas, is being analyzed, according to the CEO [7].
Meanwhile, rival FanDuel's parent company, Flutter Entertainment (NYSE: FLUT), stated that it is monitoring the prediction market scenario in the US, with a possible entry into the space in the future due to prior experience with Betfair Exchange [8]. Nonetheless, other companies such as Kalshi and Robinhood are actively operating in the prediction market space [2][3].
Sports betting revenue for DraftKings showed an increase, despite a lower 2025 financial guidance, due to favorable outcomes for customers in the first quarter, including the high rate of favorite wins during the NCAA Men's Tournament. The focus for DraftKings has now shifted towards expanding their parlay opportunity, with a 370 basis point increase in parlay handle mix in Q1. On the prediction markets front, DraftKings had initially applied to enter the sector but later withdrew, citing expanding discussions on the topic due to the growing presence of derivatives exchanges offering sports event contracts.
