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DraftKings is pushing deeper into prediction markets, with a new report arguing the company’s CFTC-regulated DKeX exchange could become a meaningful revenue driver as its core sportsbook business faces slower growth.
According to the report, Bank of America upgraded DraftKings from Neutral to Buy and maintained a $27 price target, while modeling DKeX revenue at $600 million to $800 million by 2027. That estimate reportedly includes about $400 million in direct transaction fees and up to $400 million from internal market-making operations.
DKeX becomes central to DraftKings’ next growth pitch
The report says DraftKings launched DKeX in June 2026 after acquiring Railbird Technologies. Sanford C. Bernstein is cited as estimating the platform could reach about $1 billion in consumer trading volume by December 2026.
The basic pitch is that prediction markets could give DraftKings a more year-round product, helping reduce the seasonality that comes with a sportsbook business tied heavily to the sports calendar. For players and industry watchers in New York, that matters because it signals where a major operator may focus product and compliance resources next, even though the report does not describe any New York-specific launch or consumer change.
Sportsbook pressure and legal context remain part of the story
The same report says DraftKings’ sportsbook revenue contracted about 4.6% year over year to roughly $1.44 billion. It also says the stock trades around $19, giving the company an approximate market capitalization of $9.7 billion, and notes shares are down about 44% year to date.
DraftKings recently reported earnings per share of 9 cents, compared with a consensus estimate of 2 cents, according to the source. But the report also highlights leverage, listing a forward price-to-earnings ratio of about 48 and a debt-to-equity ratio of 3.22.
On the regulatory side, the article contrasts DraftKings with Kalshi, which it says is facing litigation from multiple state attorneys general, including in New York. The report argues DraftKings enters prediction markets from a different position because it already operates in a state-by-state compliance framework and has Commodity Futures Trading Commission approvals tied to DKeX.
What to watch next
The biggest open question is whether DraftKings can actually scale DKeX to the revenue levels now being modeled. Readers should also watch for any additional detail on the scope of DKeX’s CFTC approvals, whether state regulators push back on expansion plans, and whether prediction markets start to change how DraftKings balances its sportsbook and other products. As always, if you bet or trade on real-money platforms, do so responsibly.
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Source: As reported by Jeffrey Neal Johnson.
