DraftKings and Flutter Entertainment are rapidly deepening their involvement in prediction markets, moving beyond consumer betting products and into the market-making infrastructure that powers trading activity. Recent Q1 2026 earnings reports show that major sportsbook operators are no longer simply experimenting with prediction-market apps — they are positioning themselves at the core of the industry’s liquidity ecosystem.
Key Highlights
- DraftKings CEO Jason Robins said the company aims to become one of the world’s “top two or three” prediction-market makers through its Railbird exchange.
- Flutter Entertainment revealed it began offering market-making services on a major third-party prediction platform in April, while also preparing to launch its own platform.
- Flutter lowered its full-year 2026 revenue guidance to $18.305 billion, while DraftKings maintained its projected range of $6.5 billion to $6.9 billion.
Sportsbooks Shift From Betting Products to Market Infrastructure
DraftKings posted Q1 2026 revenue of $1.6 billion on May 7, representing 17% year-over-year growth, alongside adjusted EBITDA of nearly $168 million. CEO Jason Robins emphasized that proprietary exchange technology and liquidity provision are central to the company’s long-term prediction-market strategy.
During the company’s earnings call, Robins told analysts that DraftKings sees a clear path toward becoming one of the leading market-makers globally. He also described the sector as one of the company’s fastest-growing opportunities for profitability. Much of this activity is tied to Railbird, the prediction-market exchange DraftKings acquired in October 2025.
Flutter Entertainment, the parent company of FanDuel, reported Q1 2026 revenue of $4.304 billion on May 6. However, U.S. adjusted EBITDA declined 26% year-over-year to $119 million, largely due to heavy investment spending tied to FanDuel Predicts and expansion costs related to Arkansas market operations.
Flutter’s strategy differs notably from DraftKings’. CEO Peter Jackson explained that the company has already started supplying liquidity on a large third-party prediction platform while simultaneously developing its own in-house offering, which is expected to launch in the near future.
The same day as Flutter’s earnings release, the company confirmed that FanDuel CEO Amy Howe had stepped down following a separation agreement finalized on May 5, which included a $4.4 million severance package. FanDuel President Christian Genetski has assumed leadership responsibilities, while former International CEO Dan Taylor was appointed to the newly created role of Flutter President.
Pressure Builds on the “Peer-to-Peer” Prediction Market Narrative
Prediction-market platforms such as Kalshi and Polymarket have historically argued that they function as peer-to-peer trading venues rather than gambling operators, partly to avoid stricter gambling regulations. However, the growing presence of sportsbook companies acting as liquidity providers complicates that narrative, as operators are increasingly participating directly in the trading ecosystem.
The shift also mirrors developments in crypto derivatives markets, where firms such as Susquehanna International Group and Jump Trading serve as major market-makers across digital asset exchanges. The expansion of sportsbook operators into prediction-market liquidity services places the industry on a path increasingly similar to crypto-financial infrastructure.
Attention is now turning to the upcoming May 20 Senate Commerce Subcommittee hearing on sports integrity, which could become a major regulatory milestone for the industry. American Gaming Association CEO Bill Miller is expected to testify alongside Coalition for Prediction representative Patrick McHenry, as regulators continue examining the increasingly blurred line between platform operators and market participants.
