DraftKings Inc. is advancing a vertical integration strategy in its Predictions business as it works toward a long-term companywide adjusted EBITDA margin target of at least 30%. The company launched its DKeX exchange in June 2026 and obtained Futures Commission Merchant approval in July, and now operates the brokerage, exchange and market-making components of Predictions internally, allowing it to capture more of the economics across the platform. The approach builds on DraftKings' Sportsbook experience, where approximately 95% of sports content is priced and traded in-house, and the company expects to apply the same model to Predictions to improve retention and monetization over time. DraftKings expects the shift to support unit economics through 2026 and into 2027, though Predictions is expected to generate lower revenue per customer than Sportsbook, and near-term spending remains significant with $200 million to $300 million of Predictions investment expected in 2026. The company's shares have declined 12.6% in the past three months compared with the industry's 9.7% fall, and the Zacks Consensus Estimate for DraftKings' 2026 earnings per share has declined in the past 60 days, while the company is projected to report a 50% surge in 2026 earnings.
DraftKings IncDraftKings is vertically integrating its Predictions business (DKeX exchange, FCM approval, in-house brokerage/exchange/market-making) to pursue a 30% adjusted EBITDA margin target.
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