BOSTON, August 29, 2026, 06:00 (EDT). DraftKings (DKNG) stock climbed 4.3% following a regulatory decision on Kalshi that reinforced the advantages of state-licensed operators.
- DraftKings finished Friday at $25.26, gaining 4.29% after hitting $26.58 earlier in the session.
- Trading volume hit 19.90 million shares, standing 64% higher than its stated average.
- A federal appeals court upheld Nevada’s control of Kalshi sports contracts.
- DraftKings provides a $200 welcome offer, which is 40 times greater than the required $5 qualifying wager.
DraftKings Inc. (NASDAQ: DKNG) rose 4.29% on Friday following a federal appeals court decision that reinforced the rights of states to regulate sports prediction markets. The court’s ruling limits a regulatory provision previously relied on by operators who compete with licensed sportsbooks.
The stock rose $1.04 to $25.26 with 19.90 million shares changing hands. Trading volume was 64% higher than the 12.11 million post-close average. The increase boosted market value by approximately $516 million across 496.45 million shares outstanding Google Finance.
The Ninth Circuit decided unanimously that Kalshi failed to prove federal law overrode Nevada gambling regulations. The court upheld the lifting of an injunction on contracts tied to sports events court opinion.
This is significant as prediction exchanges are able to function nationwide without obtaining a sportsbook license in each state. Friday’s ruling upholds the state-specific structure under which DraftKings has existing approvals. However, a contradictory ruling from the Third Circuit is still in effect.
| Company | Aug. 28 close | Daily move | Investor signal |
|---|---|---|---|
| DraftKings | $25.26 | +4.29% | Edge from sportsbook licensing |
| Flutter Entertainment (NYSE: FLUT) | $101.78 | +7.12% | Gain on FanDuel interests |
| MGM Resorts (NYSE: MGM) | $42.28 | -1.66% | Wider casino portfolio |
| Caesars Entertainment (NASDAQ: CZR) | $29.73 | +0.37% | Diversified digital segment |
Online-focused betting operators saw the most pronounced price response. DraftKings closed 5.0% under Friday’s intraday peak. The share remains down 48% from its 52-week high of $48.78.
The legal advantage comes amid a costly push to gain new customers. Presently, a welcome promotion provides $200 in bonus bets following an eligible $5 bet. The bonus tokens are distributed across 21 days and must be used within seven days of being issued offer terms reported August 28.
The subsidy amounts to 40 times the required qualifying wager. It is also 52% higher than DraftKings’ average monthly revenue per payer of $132 in the second quarter. This highlights the greater importance of conversion and retention over sheer sign-up numbers.
Sports consumer volume increased by 14.5% in the second quarter to $13.14 billion. Sports revenue declined 10.6% to $891.9 million, as net revenue margin narrowed to 6.8% from 8.7%. DraftKings attributed the margin decrease to customer-friendly outcomes and higher promotional reinvestment company filing.
Sales and marketing costs rose by 38.3% to $322.5 million. Adjusted EBITDA dropped 61.9% to $114.6 million. The number of monthly unique payers grew 9% to 3.6 million, but average revenue per payer fell by 13%.
Management maintained its 2026 revenue outlook at $6.5 billion to $6.9 billion. Forecast for adjusted EBITDA is unchanged, staying at $700 million to $900 million. Based on the midpoint, the shares are valued at about 1.9 times the projected revenue, using Friday’s closing market capitalisation.
The upcoming legal milestone falls on September 3, marking New Jersey’s cutoff to challenge the differing Third Circuit decision. A wider examination could clarify if state-regulated sportsbooks keep their current regulatory edge Reuters.
Risks: The split among appellate courts could be taken up by the Supreme Court, potentially undoing the benefit seen on Friday. While promotions might increase user numbers, they may lower revenue per payer. Additionally, sports results could counteract short-term handle growth.
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