New York, Feb 14, 2026, 16:33 EST — The market has closed.
- DraftKings dropped 13.5% Friday, hit by a weaker 2026 outlook that shook investors.
- The company is doubling down on prediction markets—a space that’s quickly turning into a regulatory flashpoint.
- After the Monday holiday, U.S. stocks are set to reopen Tuesday. DraftKings also has its investor day scheduled for March 2.
DraftKings tumbled 13.5% to $21.76 on Friday, pressured by a 2026 revenue outlook of $6.5 billion to $6.9 billion and adjusted EBITDA guidance between $700 million and $900 million—both coming in short of Wall Street’s estimates. Flutter Entertainment slid 11.5%. Caesars dropped 4.5%. Penn fell 5.2%.
Selling hit just ahead of a calendar lull that can distort both flows and headlines. The New York Stock Exchange will shut Monday for Washington’s Birthday, reopening Tuesday.
DraftKings is making a play for prediction markets, but investors aren’t convinced just yet—it’s the short-term drag on profits that’s raising eyebrows. The reaction in the stock shows the Street’s looking for harder evidence these new offerings can draw in users without reigniting those costly promo wars.
DraftKings reported a 43% jump in fourth-quarter revenue, hitting $1.989 billion, while adjusted EBITDA reached $343.2 million. The company’s monthly unique payers, a metric tracking average monthly paying users, stayed flat at 4.8 million. Average revenue per payer ticked up to $139. DraftKings said its 2026 outlook accounts for investments in DraftKings Predictions, but filters out the volatility from unpredictable sports results that can swing sportsbook margins. CEO Jason Robins described Predictions as a “massive, incremental opportunity.” CFO Alan Ellingson added they’re “excited to share more detail” at a virtual investor event set for March 2. GlobeNewswire
DraftKings pulled in $6.055 billion in revenue for 2025, according to a Friday filing, swinging to a net income of $3.7 million after reporting a loss the previous year. The company’s annual report detailed a buyback of 16.0 million shares at a cost of $571.5 million for 2025, part of a repurchase plan now authorized up to $2.0 billion. The report highlighted the acquisition of Railbird in October — the federally licensed exchange, which holds a CFTC designation, now serves as DraftKings’ entry point for regulated event contracts. The filing also noted that DraftKings Predictions is registered as an introducing broker with the CFTC and is a member of the National Futures Association.
Wall Street wasted no time in making adjustments. Guggenheim cut its price target on DraftKings to $37 from $42, sticking with a buy rating. Analyst Curry Baker described the 2026 outlook as “a conservative starting point” despite increased investment, and added he still anticipates share buybacks. Investing.com
DraftKings is making a move on Predictions just as so-called “event contracts”—which trade like financial instruments, not sportsbook slips—start picking up speed in sports circles. The Associated Press notes that these prediction markets fall under the CFTC’s purview, unlike sportsbooks, which are regulated state by state. On Super Bowl Sunday alone, Kalshi reported more than $1 billion in volume, the AP said. Stephen Shapiro, who teaches sports and entertainment management at the University of South Carolina, told the wire that teams and leagues still don’t really get prediction markets. AP News
Regulation remains unpredictable—and this isn’t just a hypothetical. On Friday, 23 Senate Democrats pressed the CFTC to avoid lawsuits tied to sports prediction contracts, according to WIRED. Their letter spotlights just how unsettled the legal landscape is for this rapidly expanding market.
At the moment, two dates stand out for traders: markets reopening Tuesday after the holiday, and DraftKings’ investor day on March 2. Management has committed to sharing more on Predictions and capital returns there. A new step from the CFTC or a court decision could shift sentiment in a heartbeat.
