It’s still early days for sports prediction markets, but the chief executive of DraftKings is already warning that recreational bettors might be losing their shirts to sharper “peers” a little too quickly.
- DraftKings CEO Jason Robins says some sports prediction market users are losing money faster than traditional sportsbook bettors.
- Robins compared the issue to early daily fantasy sports, saying companies need to protect recreational users and build a healthier long-term betting ecosystem.
- DraftKings plans to invest up to $300 million over the coming year to expand its prediction market business.
The Boston-based online gambling company is preparing to spend significantly on building up its presence in the prediction markets industry this year, so ensuring potential customers aren’t already burnt out and busted serves its interests.
Right now, though, DraftKings CEO Jason Robins says some early third-party data suggests prediction market customers are losing faster than they would with a state-regulated online sportsbook.
A WSJ analysis found 67% of Polymarket profits goes to just 0.1% of accounts, while most traders are in the red. Most Kalshi users also lose money. https://t.co/1OlpV8NnIf
— The Wall Street Journal (@WSJ) May 7, 2026
Moreover, Robins is suggesting some prediction market operators are being a little light on disclosure about who their customers are actually trading against on the ostensibly “peer-to-peer” exchanges.
“I think part of it is that predictions operators, some of them anyway, are sort of irresponsibly saying that this is not the same as a product like ours, where you have people playing against each other on prediction markets, when the reality is that most of the money is being put up, most liquidity is being put up, by professional market-makers, institutions, things like that,” Robins said Friday during DraftKings’ first-quarter earnings call.
“So, I think some people don't necessarily understand that, and as that becomes more apparent, I think you'll start to see that moderate,” Robins added.
Prediction markets are being sold as a lucrative side hustle, but most users lose money while the bulk of profits go to a narrow slice of high-frequency traders, a Bloomberg analysis found https://t.co/XBZ5ijHSfD
— Bloomberg (@business) April 28, 2026
Robins also said the company has seen a situation like this before with daily fantasy sports contests, where more recreational players would compete against experts. Federally regulated prediction market operators did not go through the same learning experience, which DraftKings plans to apply to its still relatively new exchange business.
“You’ve got to make sure you protect the ecosystem as best as you can, obviously, within the rules and regulations,” Robins said. “Doing things to make sure that you're building a healthy ecosystem was critical to us building out a sustainable daily fantasy sports product. And right now, I don't see that necessarily happening with some of our predictions competitors. But as time goes on, hopefully we'll set the standard there, and it'll be something that really becomes an important part of managing the ecosystem.”
The comments came after DraftKings reported better-than-expected earnings for the quarter that ended March 31. They also come as the company prepares to spend another $200 million to $300 million expanding its presence in the prediction market space after first launching its platform last December.
Overall, sports prediction markets remain a relatively new thing. The first sports-related event contracts offered for trading by federally regulated exchanges went live only in late 2024, and online sportsbook operators like DraftKings and FanDuel are only beginning to ramp up their exchange businesses. They must also do so while keeping an eye on the fluid legal situation, as prediction market news is dominated by state gambling regulators challenging the legality of sports event contracts in court.
Doing it 'right'
Still, prediction market sites offer access in states where online sports betting has not been legalized, which makes the opportunity extremely tantalizing for DraftKings and others.
Robins wrote in his quarterly business update that DraftKings wants to grow its prediction market business "the right way," including with a focus on "markets that uphold the integrity of sports, strengthen customer trust, and align with our standards for responsible engagement."
DraftKings says it is already making some gains as well. Annualized consumer trading volume was more than $1 billion in April, Robins said, and total annualized volume topped $2.3 billion, up 38% and 43%, respectively, compared to March.
Prediction markets: the hunt for the new ‘dumb money’ https://t.co/sM79k3CSuK
— Financial Times (@FT) April 3, 2026
Furthermore, DraftKings’ market-making operations are already profitable, Robins said, one of its fastest business lines ever to get in the black. The company believes that line of business can grow even bigger, too, including by trading on third-party exchanges, such as Kalshi.
“I don't see, at least on the sports front … how anyone is going to be able to match that, outside of maybe one or two of our big sportsbook competitors that also have really strong pricing models internally,” Robins said.
