DraftKings Enters Transition Phase; Eyes Prediction Markets

DraftKings Inc. is entering a period of transition marked by executive changes, new media partnerships, and a planned move into prediction markets, signaling a potential shift in strategy for the sports-betting giant.

In a regulatory filing Friday, the company announced that co-founder and president Matt Kalish will step down from his executive role effective March 31, 2026, though he will remain on DraftKings’ board of directors. The move, which was mutually agreed upon earlier this month, underscores a turning point for the Boston-based operator as it diversifies its offerings beyond traditional sports wagering. Financial terms of Kalish’s transition agreement were not disclosed.

• Leadership Transition: DraftKings co-founder and president Matt Kalish will step down from his executive role in March 2026 but remain on the board, signaling a strategic leadership shift.

• Prediction Market Launch: The company plans to debut DraftKings Predict following its acquisition of Railbird Technologies, expanding into regulated prediction markets while navigating state-level legal considerations.

• Media and Growth Strategy: DraftKings strengthens its media presence through a multi-year ESPN partnership and an NBCUniversal advertising deal, alongside expanding its share repurchase program to $2 billion.

The Developments

The announcement comes as DraftKings prepares to debut DraftKings Predict, a new prediction market product that marks its first foray into a federally regulated exchange environment. The initiative follows the company’s $48.6 million acquisition of Railbird Technologies, operator of the CFTC-designated Railbird Exchange, and is viewed by management as a key growth lever amid intensifying industry competition.

Our long-term financial potential has never been brighter,” CEO Jason Robins told analysts during Friday’s third-quarter earnings call. “Underlying growth in our business is accelerating,” he added, even as the company revised down its 2025 financial guidance.The move toward prediction markets coincides with a series of new media and content partnerships designed to bolster DraftKings’ brand visibility and user engagement.

Most notably, the company signed a multi-year partnership with ESPN, designating DraftKings as the official sportsbook and odds provider for the sports network. The deal begins December 1, following the mutual termination of DraftKings’ prior partnership with Penn Entertainment. ESPN Chairman Jimmy Pitaro said the partnership will enhance the network’s integrated betting experience, particularly through mobile and streaming platforms.

DraftKings also entered into a multi-year advertising agreement with NBCUniversal earlier this fall. According to its SEC filing, the company now holds roughly $1.3 billion in contractual media obligations over the next five years across its three major media partnerships.

Despite the significance of the ESPN alliance, analysts focused Friday’s earnings call on the potential of DraftKings Predict. The offering will allow users to trade contracts tied to sports outcomes in a structure resembling financial futures markets. DraftKings said it plans to limit access to jurisdictions without legalized sports betting, reflecting ongoing regulatory sensitivities surrounding prediction exchanges.

Market Context

DraftKings’ latest quarterly results highlighted both operational momentum and near-term challenges. For the third quarter, monthly unique payers (MUPs) averaged 3.6 million, flat year-over-year, while average revenue per monthly user (ARPMUP) rose slightly to $106 from $103. Excluding contributions from its lottery app Jackpocket, MUPs grew 6% year-over-year.

Sports betting volumes remained strong: NBA handle rose 19% and NFL wagering increased 13% compared with last season, driving an overall 17% increase in October sportsbook handle. However, a string of “customer-friendly” results—games where public favorites won—hit profitability hard. DraftKings estimated that unfavorable outcomes in major NFL games reduced quarterly revenue by over $300 million. As a result, Q3 revenue rose 4.4% to $1.14 billion, below analysts’ consensus of $1.21 billion, while adjusted EBITDA of –$126.5 million fell short of expectations. The company posted a net loss per share of $0.26, in line with estimates.

DraftKings subsequently lowered its full-year 2025 revenue guidance midpoint by 5% to $6 billion, and adjusted EBITDA guidance to $500 million, below Wall Street’s $746 million projection. Analysts at Truist Securities noted the guidance now includes the anticipated launch of DraftKings Predict, which had not been factored into prior estimates.

Our long-term financial potential has never been brighter,” said DraftKings CEO Jason Robins. “Underlying growth in our business is accelerating.

Corporate Outlook

Kalish’s upcoming departure marks a symbolic change for a company that has evolved from a daily fantasy sports platform to a dominant player in U.S. online betting and entertainment. His continued role on the board suggests a measured handoff rather than an abrupt leadership shift.

The exit announcement follows a $10 million settlement related to DraftKings’ Reignmakers NFT product earlier this year and coincides with the expansion of its share repurchase program from $1 billion to $2 billion. Since inception, the company has bought back 9.3 million shares.

Shares of DraftKings (NASDAQ: DKNG) were up marginally Friday, trading around $28, though the stock remains down roughly 27% over the past year. While short-term profitability pressures persist, Robins framed the company’s pivot toward prediction markets and media integration as laying the groundwork for its next growth phase.

“We’re building beyond betting,” Robins said. “Prediction markets open a new avenue for engagement and growth that complements our core business.” As DraftKings looks toward 2026—with Kalish transitioning out, new regulatory frontiers ahead, and a deepening media footprint—the company’s next chapter may hinge on whether it can convert strategic ambition into sustainable profitability.