DraftKings has come out of a cautious first quarter sounding considerably more bullish, pivoting its strategy to stake a real claim in the surging prediction markets space. CEO Jason Robins revealed Friday that the company’s market-making operation, launched earlier this year, has already turned profitable. Frankly, it ranks among the fastest paths to profitability in the company’s history.

A Credible Challenger in Predictions

The shift in tone is striking. Back in February, when prediction market upstarts Kalshi and Polymarket looked like they might pose an existential threat to traditional sportsbooks, DraftKings sounded hesitant. Not anymore. The company has assembled what amounts to a two-pronged assault on the predictions market: a proprietary exchange built through its subsidiary Railbird Exchange (acquired last October for $84.8 million) and an in-house market-making capability that Robins claims could rank among the world’s top two or three.

This matters. Market makers are the mechanical heart of prediction exchanges, providing liquidity by matching buyers and sellers on both sides of trades. Specialised trading firms like Susquehanna International Group and Jump Trading have traditionally dominated the role. By building this capability internally, DraftKings gains control over a revenue stream while simultaneously sharpening its exchange’s competitiveness.

Capital Efficiency and Ambition

The financial performance of DraftKings’ core business tells a more nuanced story. Monthly unique payers declined slightly to 4.2 million in Q1 from 4.3 million a year prior, though this softness largely reflects the impact of its lottery division Jackpocket. Strip that out, and the player base actually grew 2 percent year-over-year to 3.9 million. More impressively, average revenue per monthly unique player jumped to $131 from $108 in the prior-year quarter. That’s a 21 percent lift, suggesting the company is pulling more value from existing customers.

April’s trading volumes on DraftKings Predictions broke the $1 billion monthly threshold, which annualises to $2.3 billion. Granted, these numbers are dwarfed by Kalshi and Polymarket’s combined $24 billion in monthly volume, but they establish legitimate traction. The broader market is still nascent. Capital is flowing freely. Kalshi just raised $1 billion in Series F funding and is valued at $22 billion, outpacing both Flutter ($17.7 billion) and DraftKings ($12.9 billion) on the public markets.

The Flutter Competitive Lens

DraftKings’ market-making push also puts competitive pressure on Flutter, which operates FanDuel. Flutter disclosed on its own earnings call that FanDuel is piloting market-making services on third-party platforms and plans a dedicated market-making rollout later in 2025. By moving faster and integrating market-making with a proprietary exchange, DraftKings has seized a structural advantage.

What remains unknown is whether prediction markets can meaningfully contribute to DraftKings’ top line this year. The company declined to offer specific revenue projections, as have FanDuel and Fanatics. That reticence suggests either genuine uncertainty or the strategic advantage of underselling expectations. Either way, DraftKings has credibly positioned itself as more than a bystander in what could become a substantial new revenue vertical for the company.

What the team thinks

Carl Mitchell says:

DraftKings’ pivot to prediction markets is smart business, but Ashworth’s piece glosses over what really matters to everyday punters: whether these new operations maintain the same player-friendly odds and transparent terms we’ve come to expect from their core sports betting products. The speed to profitability is impressive, sure, but the real test will be whether they can scale this without the margin creep that’s plagued some of their competitors chasing quick wins in emerging verticals. I’ll be keeping a close eye on how their market-making arm affects liquidity and player value across the board.