DraftKings Inc. DKNG is increasing its focus on its new Predictions vertical, but near-term visibility remains limited. While management pointed to encouraging early traction, it noted that no revenues from Predictions are assumed in its 2026 guidance due to the early stage of the product.
At the same time, the company expects incremental costs in the tens of millions, along with additional marketing investment to scale the platform. While DraftKings can leverage existing infrastructure and marketing channels, the rollout still introduces incremental near-term costs.
This investment phase is also reflected in DraftKings’ 2026 outlook. The company expects revenues between $6.5 billion and $6.9 billion and adjusted EBITDA of $700 million to $900 million, with guidance incorporating investments in Predictions, new jurisdiction launches and disciplined planning as business conditions evolve.
Management emphasized a cautious approach to guidance, deliberately setting expectations at levels it believes are achievable. While this improves forecasting credibility, it also reflects a more measured near-term outlook as the company balances ongoing investments with its broader business performance.
Importantly, DraftKings views Predictions as “all upside” over the long term, with the potential to participate in a sizable emerging market. However, in the near term, the segment remains in an investment phase, with limited visibility into monetization.
Taken together, the combination of upfront investment, guided spending and uncertain near-term revenue contribution is likely to remain a key focus for investors as DraftKings scales this new growth initiative.