DraftKings Reported Strength Across All Segments In Q1 Earnings
DraftKings reported a strong first quarter with improved sportsbook margins, growing online casino revenue and an aggressive push into sports prediction markets.
The Boston-based operator reported revenue of $1.65 billion in the first quarter, a 17% year-over-year jump, up from $1.41 billion. Adjusted EBITDA rose 64% to $168 million and the company posted net income of $21.1 million, compared to a loss of $33.9 million in the same period last year.
“We are off to a fantastic start to the year as our first quarter results exceeded our expectations,” said CEO Jason Robins in the earnings release. “Our core business is strong, and profitability is inflecting. That gives us the firepower to press our advantage in Predictions.
“With our Super App, market making capabilities, proprietary exchange, and combos coming together, we intend to establish a leadership position in Sports Predictions before year-end.”
Sports betting drove revenue
DraftKings’ online sports betting business was robust with sportsbook revenue rising 24.1% to $1.09 billion. Sportsbook handle increased 1.5% to $14.08 billion and net revenue margin improved to 7.8% from 6.4% from 2025, especially on NBA games and NCAA men’s basketball.
CFO Alan Ellingson said on the earnings call that sports betting “led the way,” pointing to stronger margins and more parlay betting.
“Sportsbook revenue increased 24% year-over-year to $1.1 billion on net revenue margin increase of 140 basis points to 7.8%,” Ellingson said. “Parlay handle mix increased by nearly 300 basis points.”
DraftKings said monthly unique payers fell 4% to 4.2 million, mainly because of the changes to the Texas Lottery in 2025. However, excluding lottery customers, monthly unique payers rose 2%. Average revenue per monthly unique payer increased 21% to $131, primarily because of the higher sportsbook margin.
Online casino revenue continues to grow
DraftKings’ online casino business also grew, but more slowly than sports betting. iGaming revenue rose 8.9% to $461.3 million, up from $423.5 million a year earlier.
The company’s online casino footprint remains much smaller than its sports betting footprint. DraftKings is live with iGaming in five states, covering about 11% of the U.S. population. Its mobile sports betting business is live in 27 states, Washington, D.C., and Puerto Rico, covering about 53% of the U.S. population.
The company also operates in Ontario, Canada with sportsbook and iGaming offerings, covering about 40% of the Canadian population, and will launch in Alberta on July 13.
When answering analysts’ questions about the core business, Robins admitted that DraftKings has work to do in the online casino sector.
“I also think that there’s a real opportunity in the iGaming side,” Robins said. “We’ve lagged the market a little bit there. We’ve been very focused on sports naturally with the predictions and everything else going on.”
Prediction markets become a priority
During the call, Robins said DraftKings sees sports predictions as an extension of its sports betting business, not a separate side project.
“Predictions, especially in sports, is a strategic priority for DraftKings,” Robins said. “This category is still in its first inning, and we believe DraftKings is best positioned to define it. We are planning significant investment in the coming months to improve our offering, build liquidity, and scale customer acquisition. We intend to execute with urgency and establish a leadership position in sports predictions before year-end.”
DraftKings said prediction markets are now available in its main app. The company indicated customer acquisition costs for predictions fell more than 80% in April after that integration.
“In April alone, the total volume of money traded in DraftKings’ prediction markets grew drastically, pacing at an annualized rate of over $2.3 billion,” the company wrote in a letter to shareholders.
DraftKings is also building their own trading exchange and plan to launch special combined prediction wagers right before the World Cup soccer tournament begins in June.
