DraftKings Cuts Jobs, Pivots to Prediction Markets Amid 37% Stock Plunge

The company's conservative outlook of $6.5B-$6.9B, against Wall Street's $7.32B estimate, has been attributed to the explosive growth of federally regulated prediction markets like Kalshi and Polymarket. These platforms, processing over $37 billion in 2025, bypass state-by-state licensing, posing an existential threat to traditional sportsbooks.

In response, DraftKings is aggressively entering the prediction market space, launching its own platform in December 2025 and planning further integrations. CEO Jason Robins views this as a "$10 billion annual gross revenue opportunity." The company is also leveraging AI for cost efficiencies and marketing, with 70% of promotional spending now AI-determined.

While Q4 2025 saw strong revenue and EBITDA growth, the pivot is critical for future competitiveness.