DraftKings’ push into prediction markets could develop into a business worth more than $1 billion in annual revenue by the end of the decade, according to a new analysis from Citizens Equity Research that highlights the growing significance of the company’s event-contract strategy.

In a research note (pdf) published June 19, analysts Jordan Bender and Isabelle Slavin outlined projections suggesting that DraftKings Predictions could become a major contributor to the company’s long-term value if it secures a meaningful share of the emerging prediction markets sector.

Their estimates indicate that a 20% share of the market across states where DraftKings operates could produce approximately $907 million in annual revenue by 2030. If the company reaches a 30% share, annual revenue could climb to roughly $1.3 billion.

“While the business remains in its early stages, our analysis suggests the opportunity could ultimately be larger than the company’s current market cap,” wrote the analysts. “… By 2030, we estimate the prediction market opportunity could generate ~$907M of revenue at a 20% market share across its operating states and ~$1.3bn at a 30% share.

Applying Kalshi’s implied revenue multiple ($22bn valuation; $2bn of annualized revenue) suggests a 20% market share could be worth ~$10 billion of EV for DraftKings and ~$14bn at a 30% share, similar to the company’s current size. In other words, we do not believe the market is appropriately valuing the opportunity.”

Enterprise Value Potential Draws Attention

Citizens’ assessment links DraftKings’ future valuation to the growth of prediction markets, an area that remains under legal and regulatory scrutiny across the United States. The analysts noted that their projections assume sports event contracts remain available to operators such as DraftKings in the years ahead.

A series of court disputes involving prediction markets continues around the country, and many industry observers believe the issue could eventually reach the U.S. Supreme Court.

The report also emphasized the valuation implications associated with gaining market share. Separate commentary from Citizens analyst Jordan Bender suggested that DraftKings could add between $10 billion and $14 billion in enterprise value if it captures 20% to 30% of the prediction markets industry by 2030.

Those estimates draw comparisons to Kalshi, the largest regulated prediction market platform in the United States. Kalshi recently achieved a private-market valuation of $22 billion and is reportedly approaching an annual revenue run rate of $2 billion.

Product Expansion Fuels Growth Strategy

DraftKings entered the prediction markets sector in December with the launch of its standalone DraftKings Predictions app. The platform debuted in 38 states and initially included sports event contracts in 17 jurisdictions where the company was not authorized to offer traditional state-regulated sports betting.

Since then, the company has broadened its footprint. DraftKings Predictions now operates in 48 states, with Maine and New Hampshire remaining the only exceptions. The platform currently offers sports event contracts in 18 states.

The product itself has also expanded considerably. What began as a limited selection of CME Group event contracts now includes player-proposition-style markets and parlay-like Combo products supplied by Crypto.com. DraftKings has also integrated Predictions into its broader multi-product mobile application.

The company plans another major step through the launch of an in-house exchange built on Railbird, a federally licensed exchange acquired by DraftKings as part of its prediction markets strategy.

According to management, recent enhancements have helped accelerate activity on the platform. DraftKings reported earlier this month that annualized consumer trading volume increased 24% month over month in May, while annualized total volume traded rose 34%.

“Predictions, especially in sports, is a strategic priority for DraftKings,” CEO Jason 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.”

Customer Growth and Exchange Economics

DraftKings executives have repeatedly pointed to customer acquisition as one of the platform’s key benefits. During an earnings call in May, Robins said trading volume per customer on event contracts had surpassed sportsbook handle per customer. He also noted that customer acquisition costs fell by 80% in April after Predictions was integrated into the company’s main application.

Citizens analysts reported that DraftKings app downloads have risen sharply in June, increasing 249% month-to-date as the company expands access to sports-related prediction products nationwide.

“DraftKings app downloads are up 249% month-to-date as the company begins acquiring customers through a sports offering that is now live across the U.S.,” writes Bender. “We believe the company is targeting 2 million to 3 million new customers in 2026 based on current customer acquisition costs and marketing spending.”

Analysts believe the next stage of growth could arrive once DraftKings begins directing more activity through its own exchange infrastructure rather than relying heavily on CME Group and Crypto.com.

At present, much of the order flow connected to DraftKings Predictions is processed through outside providers. Citizens noted that this limits the company’s exposure to the more profitable market-making side of the business. Despite growing activity, reported consumer volume translated into only about $2 million in gross revenue last month.

“Currently, the company has no meaningful market-making activity and little volume flowing through its exchange, implying that the figures reported to date are relatively insignificant from an earnings perspective,” added Bender and Slavin. The analysts expect that to change as the NFL season approaches.

Citizens believes market making could become one of the strongest profit drivers for the company’s prediction market operations. Based on discussions with market participants, the analysts argued that DraftKings’ expertise in sports wagering may provide an advantage in sports-focused event contracts.

Looking further ahead, Citizens estimates DraftKings’ take rate on prediction market activity could rise from roughly 2% of consumer volume today to between 5.5% and 6%. The firm also projects that market-making operations could contribute as much as $200 million in EBITDA by 2030, while prediction market investments may add $28 million to the company’s 2026 guidance through contribution profit over the next several months.