DraftKings released its Q1 financial results on Thursday, indicating a 17% increase in revenue. The company is eyeing further growth through prediction markets, with esports likely to be available on DraftKings Predicts soon.
On the back of the Q1 results, DraftKings’ stock price rose around 7%. Revenue reached $1.6 billion, leading to net income of $21.1 million, compared with a net loss of $33.9 million in Q1 2025.
That makes back-to-back profitable quarters for the sportsbook for the first time after posting positive numbers in Q4 last year.
Esports Betting Could Soon Come To DraftKings Predicts
Prediction markets are a key target for future growth. CEO Jason Robins commented, “Our core business is strong, and profitability is inflecting. That gives us the firepower to press our advantage in Predictions.”
DraftKings launched DraftKings Predicts last year and is gambling that this will provide an avenue into major states that have not yet legalized sports betting, such as Texas, California, and Florida. It has already given up its sports betting license in Nevada to focus on prediction markets.
“With our Super App, market-making capabilities, proprietary exchange, and combos coming together, we intend to establish a leadership position in Sports Predictions before year-end,” Robins added.
Competitors such as Kalshi and Polymarket already have a wide range of esports markets available on their platforms. As DraftKings expands its app, it will likely match the companies that have led the breakthrough of sports prediction markets in the US.
Contrasting Week With Rival FanDuel
While DraftKings reported favorable results, its major rival in the betting and gaming industry, FanDuel, had a more turbulent week.
The company reported a 9% drop in sports betting handle for the quarter. The lack of growth led to the dismissal of CEO Amy Howe.
DraftKings, meanwhile, saw its betting handle increase by 1.5%, which led to sportsbook revenue growing 24.1%. FanDuel’s revenue grew a mere 1%.
“The increase in the Company’s first quarter 2026 revenue was driven primarily by efficient customer acquisition over the past year and continued healthy customer engagement, as well as higher Sportsbook net revenue margin,” said DraftKings.
Contrastingly, FanDuel said that it “exited 2025 with a smaller customer base than anticipated, which continued to impact growth during the quarter.”
Both Companies Target Prediction Market Making
In addition to expanding the range of markets available and the states where their prediction markets are on offer, both FanDuel and DraftKings said they will use the platforms to trade.
With a constant flow of events, a big part of that could be trading on esports markets, which offer significant opportunities for betting companies to maximize profits, according to a recent report from DATA.BET.
Peter Jackson, the CEO of Flutter, FanDuel’s parent company, said they have already begun trading on events at third-party prediction market platforms.
“In April, we began trialing market-making services on a major, third-party prediction market platform,” Jackson said in the company’s earnings call. “Early indicators have been encouraging, and we expect to launch our market-making platform in the coming months.“
DraftKings similarly said that it aims to use its market-making capabilities to utilize prediction markets for future profits.
Microbetting Could Come To Prediction Markets
Earlier this week, the company’s co-founder, Paul Liberman, said offering microbetting on prediction market platforms will be the next step. This would generate significant trading opportunities as well as attract a wide range of users.
In esports, live in-play betting dominates wagering, according to a report from Oddin.gg. Dota 2 attracts the most in-play bets, with 86% of all wagers coming during live matches.
Betting on markets such as the next kill, next map, or similar microbets have attracted criticism, however. The Public Health Advocacy Institute (PHAI) sued both FanDuel and DraftKings last month, alleging the companies encourage gambling addiction through microbets.
The markets are not yet available on prediction markets. Companies such as Kalshi have argued that sports markets are viable under the Commodity Exchange Act (CEA) because they have real-world economic consequences.
That argument may be harder to make for microbets, but the companies leading the charge into sports prediction markets show no signs of slowing their expansion. DraftKings is adamant that it will be the leader in the space in the near future.