DraftKings has cut its full-year 2026 guidance after third-quarter revenue fell short of analyst expectations, with the bulk of the reduction driven by a larger investment in its prediction markets business.

The Boston-based operator reported revenue of about $1.33bn for the three months to 30 September, up 16% year on year but below the roughly $1.39bn analysts had forecast, according to Associated Press and Bloomberg. It posted a net loss of $468.7m, or $0.94 per share, and an adjusted loss of $0.53 per share.

Guidance reset

DraftKings now expects 2026 revenue of $6.35bn to $6.55bn, down from a previous range of $6.5bn to $6.9bn. Adjusted EBITDA guidance was cut more sharply, to $175m to $275m from $700m to $900m.

The company said the revised EBITDA range includes adjusted EBITDA investment in Predictions of $650m to $700m, and Bloomberg reported that the new outlook primarily reflects the increase in that spending.

Shares fell about 19% in extended trading on Thursday from a close of $23.52, according to Bloomberg.

At the midpoints, the changes take $250m off expected revenue and cut the adjusted EBITDA forecast from $800m to $225m. The adjusted loss per share of $0.53 also compared with a consensus estimate of a $0.39 loss cited by Benzinga.

Spending rose sharply in the quarter. Sales and marketing expense increased 68% year on year to about $605.7m, according to analyst coverage of the results.

A bet on 2027

Management used the results to set out its first view of 2027, guiding to revenue of $7.35bn to $7.75bn. That is split between $6.7bn to $7.0bn from the core sportsbook and iGaming business and $650m to $750m from Predictions.

Adjusted EBITDA for 2027 is guided at $800m to $1bn, including a further $250m to $350m of Predictions investment. Bloomberg said analysts had been expecting around $1.12bn.

“The third quarter marked a pivotal moment for DraftKings, as the Predictions offering we have been building is now powering meaningful growth for our business,” chief executive Jason Robins said, adding that the company believes it is “set up for an exceptional 2027”.

Robins said more than 1.6 million customers have engaged with DraftKings Predictions in 2026. In the core business, monthly unique payers rose 13% to 4.1 million, while average revenue per monthly unique payer increased 3% to $109.

Prediction markets reshape the US majors

The results underline how quickly prediction markets have moved from side project to the main driver of capital allocation at the largest US operators. DraftKings is spending heavily to build share in event contracts, which it can offer in states where it does not hold a sportsbook licence, at a time when regulators are still fighting over whether those products are gambling at all.

That regulatory risk has already cost it reach. DraftKings was one of three operators that pulled prediction market products from Utah this month, and the CFTC has since told exchanges to stop geofencing states, which could force further decisions about where the product is offered.

Rival Flutter also reduced its outlook this week, trimming 2026 guidance as its Brazil exit and sports results weighed on the third quarter. Investors will now be looking for evidence that DraftKings’ Predictions spending converts into durable revenue rather than simply buying volume, with the 2027 guidance the benchmark against which that will be judged.

The US Commodity Futures Trading Commission (CFTC) has told designated contract markets (DCMs) to stop blocking customers by state within 30 days, a move that strikes at the geofencing prediction market operators have used to manage legal fights with state gambling regulators.

In an interpretation published on 5 November, the Commission said the requirement in Regulation 38.151(b) that DCMs provide “competitive, open, fair, and impartial access” to members and persons with trading privileges is incompatible with domestic geographic restrictions.

“Derivatives markets must operate on a uniform basis at a national scale in order to achieve the purposes set out in the Commodity Exchange Act,” said CFTC Chairman Michael Selig. “Geographic access restrictions are inconsistent with those purposes and the Act’s impartial access requirements.”

Thirty days to comply or explain

Under the interpretation, DCMs must cease domestic geographic restrictions that breach the impartial access requirements within 30 days, or submit an explanation to the CFTC’s Division of Market Oversight setting out why compliance is not feasible.

The obligation reaches beyond the exchanges themselves. Within the same 30-day window, DCMs are expected to ensure that intermediaries accessing their markets are not impeding, and are complying with, the exchange’s impartial access requirements, again with the option of filing an explanation instead. The Commission said it would consider the facts and circumstances of any particular case in connection with potential action.

That second limb matters for the sportsbook operators that have moved into event contracts through brokerage arrangements with CFTC-registered exchanges. Trade press reports on the interpretation named FanDuel and Fanatics among the intermediaries likely to be affected, and Law360 reported the move as a directive to stop geo-blocking users.

Collision course with the states

Until now the CFTC had not read the impartial access principle as applying to geography within the US. That gave platforms room to switch off sports contracts in individual states where courts or regulators had found them to be unlicensed gambling, while keeping them live elsewhere.

Geofencing has been the industry’s main pressure valve in recent weeks. DraftKings, FanDuel and Fanatics pulled their prediction market products from Utah at the start of this month after the state escalated its campaign against event contracts, and the Second Circuit this week refused to halt state enforcement against Kalshi and Coinbase while their appeal proceeds.

Commentators quickly flagged the bind the interpretation creates. Where a state court has ordered a platform to stop offering contracts to its residents, removing the geofence could put the operator in breach of that order, and sportsbook operators holding state licences could put those licences at risk by serving residents of states that regard the contracts as illegal betting. The comply-or-explain mechanism appears designed to absorb at least some of those cases, but the CFTC has not said what explanation it would accept.

Part of a wider federal push

The interpretation is the latest step in an increasingly assertive federal effort to establish the CFTC as the sole regulator of exchange-listed event contracts. Last month the Commission and the Department of Justice sued Utah to block its crackdown on prediction markets, arguing that the Commodity Exchange Act pre-empts state gambling law in this field.

Requiring nationwide access sharpens that pre-emption argument. If exchanges are obliged under federal rules to serve every state on equal terms, platforms facing state enforcement can argue that the conflict is between state law and a federal requirement, not merely a commercial choice to operate.

The 30-day clock points to early December as the deadline for exchanges either to switch geofenced states back on or to file their explanations. State regulators and tribal gaming interests, many of which are already in litigation over sports event contracts, are likely to treat the interpretation as a fresh front in that dispute.

The Nevada Gaming Control Board has recommended licences for five new sportsbooks in rural and northern Nevada, three of which will take Caesars’ William Hill brand into Terrible’s casinos.

The board voted unanimously and without discussion at its meeting in Las Vegas on 4 November, the Las Vegas Review-Journal reported. The applications, listed as items 11 to 15 on the board’s November agenda, cover nonrestricted licences limited to a race book and sports pool, plus approval for off-track pari-mutuel race and sports wagering.

William Hill adds Terrible’s

William Hill Nevada I, which trades as William Hill Race & Sports Book and is owned by Caesars Entertainment, sought approval for books at Terrible’s Casino in Indian Springs, Terrible’s Casino in Carlin and Terrible’s Searchlight Casino in Searchlight. The three locations stem from a partnership between William Hill and Terrible’s, the Nevada casino and convenience store chain.

The additions take William Hill to more than 110 locations in the state, many of them kiosk-only, according to local reports. William Hill has long held the largest retail footprint of any sportsbook operator in Nevada, built largely on outlets in locals casinos, bars and taverns away from the Las Vegas Strip.

Boomer’s expands in the north

The other two recommendations went to Boomer’s Sports Book, the independent operator founded by former William Hill US chief executive Joe Asher. Boomer’s applied to open books at the Nevada Nugget Casino in Dayton and at the Delta Saloon in Virginia City, both near Carson City.

The two sites put Boomer’s in direct competition with William Hill for the type of small-town casino and saloon venue that has long been the backbone of Nevada’s retail sports betting map.

Commission vote on 19 November

The Control Board’s recommendations now go to the Nevada Gaming Commission, which has final say on licensing. The commission is scheduled to consider the applications at its meeting in Las Vegas at 10am on Thursday 19 November, according to the regulator’s 2026 meeting schedule.

The approvals come as Nevada’s retail market holds steady. Statewide gaming win was flat at $1.28bn in September. Unlike most US states with legal sports betting, Nevada requires remote wagering accounts to be tied to a licensed land-based book, which keeps physical locations central to how operators compete for customers.

That structure is why expansion in Nevada still means signing up casinos, bars and convenience-store venues one by one. Both William Hill and Boomer’s are betting that rural and small-town locations remain worth the licensing effort.