DraftKings shares slide as 2026 forecast falls short of Wall Street estimates

Shares of DraftKings fell sharply in extended trading on Thursday after the online betting company forecast 2026 revenue and profit below Wall Street expectations, overshadowing stronger-than-expected fourth-quarter 2025 results.

The Boston-based operator forecasts 2026 revenue of $6.5 billion to $6.9 billion, compared with analysts’ estimates of about $7.3 billion, according to a company statement. Adjusted earnings were projected at $700 million to $900 million, below expectations of $998 million.

DraftKings shares dropped as much as 17% to around $20.86 in after-hours trading, near levels last seen in April 2023.

The outlook comes as online betting stocks face mounting pressure from investor concerns that prediction markets are eroding traditional sportsbook demand. Shares of sector peers, including Flutter Entertainment Plc, which owns FanDuel, have declined in recent months.

In response, DraftKings, FanDuel, and others have launched their own prediction-style products. DraftKings said its 2026 revenue and earnings forecasts reflect expected investment in DraftKings Predictions, as rival platforms such as Kalshi gain traction.

Chief executive Jason Robins said the company plans to use growth capital to expand its prediction markets offering and “acquire millions of customers,” adding that DraftKings has the expertise to scale the business.

The company also said its guidance excludes potential variability from sports outcomes and assumes state tax rates remain unchanged, an assumption that analysts say could pose downside risk as lawmakers in several states consider higher levies.

Michigan Governor Gretchen Whitmer has proposed higher betting and iGaming taxes, while Arizona Governor Katie Hobbs has called for a sharp increase in the state’s sports betting tax rate.

Despite the weaker outlook, DraftKings reported fourth-quarter revenue of $1.99 billion, slightly ahead of estimates, while adjusted EBITDA rose to $343.2 million, topping Wall Street forecasts.

Monthly unique players were unchanged at 4.8 million, falling short of analysts’ expectations of 5.4 million. Excluding the Jackpocket online lottery product, sports and casino players increased 5%, the company said.

DraftKings is live with mobile sports betting in 26 states and Washington, D.C., which collectively represent approximately 52% of the U.S. population, according to the statement.