DraftKings Can Be Long-Term Prediction Markets Winner

May 21, 2026

Although DraftKings (NASDAQ: DKNG) is a relatively new player in the prediction industry, having introduced DraftKings Predictions in December of last year, the firm is already making progress in the event contracts market, leading one analyst to predict that the operator will be a long-term winner.

With a "buy" rating and a 12-month price target of $30, Freedom Capital Markets analyst Nick McKay began covering DraftKings, suggesting a 20% increase from the May 20 close. He identified DraftKings' "Super App" as a factor contributing to the gaming company's long-term growth in prediction markets.

"Among the Company’s 10.5 million unique customers, we would expect many to gravitate towards DraftKings’ offering given: (1) the inclusion of Predictions within the Super App, (2) the single account and wallet, (3) the more familiar betslip interface, with Predictions betting options gradually becoming indistinguishable from traditional Sportsbook offerings, and (4) the Company’s expertise in live market bets and combos (parlays),” notes McKay.

Contrary to some recent sell-side remarks about the company, DraftKings' prediction market opportunity is optimistic.

BNP Paribas gave DraftKings a rare "sell" rating last week, citing pressure from competitors like Polymarket and Kalshi.

The DraftKings playing field is expanded by prediction markets.

Prediction markets are now governed at the federal level, so operators are not burdened with a patchwork of state licenses and rules. Additionally, it puts businesses like DraftKings in a position to reach a larger clientele than is possible with traditional sports betting.

As McKay notes, the business anticipates being in front of 95% of US adults by the end of this year because to DraftKings Predictions. On the sportsbook side of the company, that percentage is only 52%.

“States that have traditionally opposed legalizing sports gambling such as California and Texas will have become part of the addressable audience. The gross margins of prediction market bets are estimated to be 10% to 30% higher than (sports betting),” says the analyst.

DraftKings has confirmed that it anticipates headroom for event contract margins to surpass those connected with online sports wagering, highlighting the profit opportunity available with prediction markets.

Positive Risk/Reward for DraftKings company Although DraftKings shares have dropped 29.3% over the last year, the company has recently recovered, rising by about 8% in the last month. The operator reported $100 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) in April, and McKay believes the shares have a good risk/reward ratio.

“For FY:26, we are modeling revenue and adjusted EBITDA of $6.75 billion and $800 million vs. guidance of $6.5 billion to $6.9 billion and $700 million to $900 million,”: concludes the Freedom Capital Markets analyst. “For FY:27, our estimates are $7.5 billion and $1.17 billion, with the core profitability implied by FY:26 guidance potentially north of $1 billion after excluding $200 million to $300 million of prediction markets spend.”