Acquiring customers at scale is no longer the name of the game for online sports betting.
According to executives on Kings Project“Friday (May 8)” Q1 2026 earnings callCompetition is increasingly focused on infrastructure, data science, and product integration.
CEO Jason Robbins Sports Predictions as the company’s next strategic frontier, describing the category as a massive adjacent opportunity capable of reshaping how consumers engage with live sports. Instead of treating prediction markets as a side business, DraftKings is integrating them directly into its main app and building what Robins has repeatedly called a nationwide “super app” for sports engagement.
The company’s earnings for the first quarter of 2026 provided more than just a solid financial update. Revenue rose 17% year over year to $1.646 billion, while adjusted EBITDA rose 64% to $168 million. DraftKings also posted its second straight quarter of positive net income, a feat that would have seemed distant during the industry’s support-heavy expansion phase.
But the most important message from management was not about profitability. It was about reinvention.
See also: DraftKings sees slower growth in 2026 despite projected $10 billion market opportunity
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DraftKings is looking to evolve from sportsbook to stock exchange
The deeper story inside DraftKings’ earnings isn’t simply about revenue outperformance or guidance misses. It’s about corporate identity. For years, DraftKings has benefited from being seen as an insurgent growth company operating in a newly legal market. Investors rewarded expansion above all else because the category itself was still incomplete.
Today, DraftKings increasingly faces the inevitable consequence of market maturity. Several major states that could potentially legalize sports betting have already done so. Customer acquisition costs are stabilizing rather than collapsing. Competition among major operators has evolved from a battle for territory to a competition centered around retention, engagement and product differentiation.
In the case of DraftKings, that means sports betting, prediction markets, fantasy contests, casino gaming, media integrations, payments, and live event participation, all operating within a unified ecosystem.
The clearest indication of DraftKings’ ambitions lies in its infrastructure investments. The company doesn’t just place prediction products on an existing sportsbook. It builds the basic mechanisms of financial exchange.
The company stated that expected consumer volume on an annual basis exceeded $1 billion in April, while total trading volume exceeded $2.3 billion. Customer acquisition costs for prediction products also decreased by more than 80% after integration into the main DraftKings app.
Management also revealed in a call on Friday that DraftKings has already launched internal market making operations and plans to introduce a proprietary exchange ahead of the World Cup. These capabilities are a key element of how modern financial markets function: market makers provide liquidity, exchanges facilitate transactions, and pricing models determine efficiency and profitability.
Robbins admitted as much during the earnings call, arguing that whether consumer experience is structured “as a bet or a contract,” the core drivers remain the same: liquidity, pricing accuracy, customer confidence, and seamless execution.
See also: Prediction markets turn uncertainty into a business model
Artificial intelligence and regulation are changing industry economics
Meanwhile, company executives noted that internal operating strength is accelerating due to AI-enabled workflows. According to the CFO Alan Ellingsonsome teams are now operating at two or three times the previous year’s productivity levels under what he describes as an “AI-first implementation” model.
As Ellingson emphasized, artificial intelligence (AI) is not just about reducing customer service costs or automating programming tasks. It changes how quickly organizations can iterate products. And in industries that rely on continuous improvement, from gaming to advertising to financial trading, speed can increasingly become a competitive trench.
For DraftKings, faster iteration may be particularly important in prediction markets, where user behavior, liquidity dynamics and regulatory structures evolve simultaneously. DraftKings expects to invest between $200 million and $300 million in forecasting-related initiatives through 2026, which includes marketing, technology and customer acquisition.
Prediction markets also hold an unusual place in the US regulatory environment. Unlike traditional sports betting, which requires state-by-state certification and licensing, some prediction products can operate within federal frameworks that bypass some state restrictions.
Robins argued that prediction markets are beginning to change conversations with lawmakers, especially in states that have not legalized online sports betting. He suggested that having predictive products accessible at the federal level weakens arguments in favor of maintaining restrictive state policies while simultaneously creating pressures against increasing taxes on regulated sportsbooks.
So DraftKings faces a delicate balancing act. It must continue to prove that its core sports betting business can generate increased profitability while simultaneously investing in entirely new categories that may define the next decade of digital betting.
