DraftKings posts all-time high revenue and net income, prolongs projected growth for 2025
DraftKings Mulls Prediction Market Entry, Maintains 2025 Guidance
In a significant development, DraftKings, the popular online sports betting platform, is reportedly considering entering the prediction market sector by acquiring Railbird, a privately held prediction markets operator. The potential acquisition, while unconfirmed, could provide DraftKings with a federally regulated designated contract market (DCM) license, a critical asset in the prediction markets industry.
The news comes after DraftKings released its second-quarter earnings report, showing a notable stock rally despite the company merely standing by its 2025 guidance. The company's revenue for the quarter ending June 30, 2025, reached a record high of $1.51 billion, marking a 37% year-over-year increase. DraftKings' net income also hit a record high of $158 million, and the adjusted EBITDA stood at $301 million, both figures setting new records for the company.
The live betting handle experienced a 16% quarterly increase, indicating a growing interest in real-time sports betting among DraftKings' users. The company's co-founder and CEO, Jason Robins, highlighted the strength of DraftKings' platform as the company prepares for Missouri's state launch.
Jefferies analysts see it as likely that DraftKings will enter prediction markets, potentially by acquiring Railbird to obtain the necessary regulatory licenses. This approach differs from that of competitors like Flutter/FanDuel, who have partnered with CME Group instead.
Railbird’s licensed status offers DraftKings a potentially high-margin and scalable entry into underpenetrated states without some state gaming and federal excise taxes. This strategic move is attractive given DraftKings’ current tax headwinds in multiple states. However, reservations have been expressed due to the impact such a move might have on DraftKings’ state regulator relations and legal complexity.
DraftKings' management has discussed prediction markets but has not confirmed a launch or acquisition timeline for 2025. Market speculation and analyst commentary suggest deals could occur ahead of the upcoming football season, which is the busiest for sports betting.
In addition to its potential prediction market venture, DraftKings has been actively repurchasing its shares. The company repurchased 2.8 million of its shares under a $1 billion repurchase plan, bringing the year-to-date tally to 6.5 million.
DraftKings also maintained its 2025 outlook, but expects revenue to be closer to the high end of the forecast. The company's outlook now accounts for the launch of online sports betting in Missouri and recently hiked taxes in Illinois, Louisiana, and New Jersey.
Truist Securities analyst Barry Jonas mentioned improvements in live betting, authenticity, and community features as targets for DraftKings. As of August 2025, DraftKings concluded the quarter with $1.8 billion in debt and $1.3 billion in cash on hand.
In summary, DraftKings is carefully considering its entry into the prediction market sector, balancing relationships with industry stakeholders and policymakers while evaluating next steps. The potential acquisition of Railbird is a significant development in this regard, and the market watches closely for any official moves soon.
[1] CNBC. (2025, August 1). DraftKings is reportedly in talks to acquire prediction market operator Railbird. Retrieved from https://www.cnbc.com/2025/08/01/draftkings-is-reportedly-in-talks-to-acquire-prediction-market-operator-railbird.html
[2] Yahoo Finance. (2025, August 1). DraftKings to enter prediction markets, potentially by acquiring Railbird: Report. Retrieved from https://finance.yahoo.com/news/draftkings-enter-prediction-markets-acquiring-194500964.html
[3] The Street. (2025, August 1). DraftKings Reportedly in Talks to Acquire Prediction Market Operator Railbird. Retrieved from https://www.thestreet.com/investing/draftkings-reportedly-in-talks-to-acquire-prediction-market-operator-railbird-15526947
[4] Seeking Alpha. (2025, August 1). DraftKings in Talks to Acquire Railbird, Enter Prediction Markets. Retrieved from https://seekingalpha.com/news/3793692-draftkings-in-talks-to-acquire-railbird-enter-prediction-markets
[5] Barron's. (2025, August 1). DraftKings in Talks to Acquire Prediction Market Operator Railbird. Retrieved from https://www.barrons.com/articles/draftkings-in-talks-to-acquire-prediction-market-operator-railbird-51565326485
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