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Discussed in this piece:

1) DraftKings lost $67.6m, Flutter lost $296m

2) DraftKings' Predictions volume went 5x in four months

3) FanDuel is chasing prediction markets market-making

DraftKings lost $67.6 million in the second quarter of 2026. Flutter, who own FanDuel, lost $296 million.

A year ago, those same three months made them $157.9 million and $37 million.

The results show that variance hit these books hard (punter-friendly). But both are spending heavily on prediction markets, in two different ways.

We covered this split in our Q2 report. Since July 2025, Flutter have lost 64% of its market value and DraftKings 40%, while Robinhood are up 9%. And over the same period, prediction market volumes have skyrocketed.

If you haven't read our Q2 2026 report yet, you should.

Read our 70-page report for free below! 👇

DraftKings' ($DKNG ( ▼ 1.61% )) revenue came in at $1.443 billion, down 5% year on year. Adjusted EBITDA fell from $300.6 million to $114.6 million, taking their margin from 19.9% to 7.9%.

Two things did that.

They acquired roughly 73% more customers than the same quarter last year, at a cost per customer (CAC) that is 8% lower.

Monthly Unique Payers rose 9% to 3.6 million, and average revenue per payer fell 13% to $132.

Full-year guidance remains unchanged at $6.5 billion to $6.9 billion in revenue and $700 million to $900 million in adjusted EBITDA.

DraftKings launched Predictions in December 2025. Over 600,000 customers have used it so far in 2026.

Annualised total volume traded went from $2.3 billion in April to $11 billion in July, close to 5x in four months. Most of the step change landed in June, when it jumped from $3.1 billion to $9.1 billion, coinciding, of course, with the World Cup.

More than half of their Predictions customers have used combos, and combos are already approaching 20% of Predictions consumer volume. Sound familiar?

They say they're acquiring these customers well below Sportsbook customer acquisition cost, and that volume per customer and month-on-month retention already look like a Sportsbook customer's.

(🧠 Quick opinion here I’d love to know just exactly how the CAC on prediction market customers is ‘well below’ CAC for their sportsbooks. Perhaps it’s the ability to advertise across state lines? Or is it just a small sample size that included the World Cup)

Interestingly, they also disclosed who they think is trading. Based on internal analysis, DraftKings estimated that 80% to 90% of prediction market consumer volume in states that already have a regulated Sportsbook comes from professional betting syndicates and institutional traders.

That's their argument for Predictions being incremental rather than cannibalising their own business. It's also the highest estimate I've seen anyone put on syndicate share, where others have ballparked this at anywhere between 50-65%.

Flutter's group revenue was $4.326 billion, up 3%. Group adjusted EBITDA fell 45% to $508 million, with their margin dropping from 21.9% to 11.7%.

FanDuel's revenue fell 6% to $1.683 billion, with sportsbook down 15% and iGaming up 14%. US adjusted EBITDA fell 70%, from $400 million to $119 million, and US margin dropped 1,520 basis points to 7.1%.

Net revenue margin fell 170 basis points to 8.7%. Promotional spend rose 140 basis points to 5.4% of handle. Sales and marketing rose 61% to $353 million, which Flutter attributes to the World Cup and to FanDuel Predicts.

FanDuel's structural revenue margin rose 40 basis points to 14.0% on heavy Same Game Parlay penetration during the World Cup. Over in Central and Eastern Europe, net revenue margin improved 310 basis points on a higher mix of multi-leg bets.

Flutter cut full-year guidance, taking group revenue down $395 million to $17.91 billion at the midpoint and adjusted EBITDA down $210 million to $2.655 billion. Most of that is a deliberate $385 million of revenue and $270 million of adjusted EBITDA going into strengthening FanDuel's sportsbook.

And Peter Jackson is leaving after nearly nine years. Dan Taylor, currently President of Flutter and CEO of Flutter International, takes over on 1 October.

FanDuel Predicts revenue in Q2 was, in Flutter's own words, not material. They expect H2 gross revenues to be fully offset by customer acquisition costs, with the product only contributing from 2027. Operational progress in the first half was slower than planned, by their own account.

Market making brought in $6 million in Q2 and Flutter now expect about $50 million of revenue from it in 2026.

They put it plainly in the shareholder letter.

Combination markets across platforms means quoting combos on venues FanDuel don't own, for customers who aren't theirs. Which is really interesting.

Another interesting piece in all of this: FanDuel Predicts sports and novelties contracts are moving to the Crypto.com exchange, agreed with CME, whilst CME keep the financial markets.

So DraftKings bought Railbird and built their own exchange, and whilst it appeared FanDuel would look to do something in their CME joint venture, it appears as though sports are now out of the question for that particular short marriage.

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