According to analysts at Citizens, the most significant aspects of DraftKings' prediction markets may not yet be realized. In a recent research note, analysts Jordan Bender and Isabelle Slavin highlighted that the upcoming integration of the Railbird exchange and the company's market-making initiatives could surpass the current focus on customer growth and trading volumes.
Citizens projects that DraftKings could achieve around $1 billion in annual revenue by 2030, estimating revenues of $907 million with a 20% market share and up to $1.25 billion with a 30% share.
Based on these market share predictions, the analysts believe that the prediction market segment could be valued between $10 billion at a 20% market share and $14 billion at a 30% share.
This analysis comes as DraftKings is actively developing its strategy, which includes enhancing its Predictions platform, launching parlay-style “Combos” contracts, and preparing to introduce its DKeX exchange infrastructure.
Currently, the prediction market volume is relatively small in terms of earnings. DraftKings reported around $108 million in consumer trading volume for May, which Citizens estimates translates to about $2 million in gross revenue at a 2% take rate. The analysts pointed out that promotional expenses likely offset much of this revenue during the period.
Furthermore, Citizens noted that DraftKings has indicated plans for customer acquisition spending related to Predictions, which could range from $200 million to $300 million in 2026. Based on current marketing costs, analysts predict that DraftKings could attract between two and three million new customers this year.
This emphasis on acquiring new customers aligns with management’s broader strategy. Earlier this year, CEO Jason Robins emphasized that prediction markets are a strategic priority and a means to attract users from states where sports betting is not yet legalized.
DraftKings has also significantly evolved its Predictions ecosystem since its launch in December. Initially centered around a limited range of CME Group event contracts, the platform has expanded its offerings considerably.
In May, the company launched “Combos,” a parlay-style product based on Crypto.com’s event-contract framework. Executives have hinted at the potential introduction of more popular sports betting contracts, including microbetting.
Additionally, DraftKings has adjusted its fee structure and integrated Predictions into its broader multi-vertical “super app,” which now includes sports predictions along with sportsbook, casino, fantasy sports, and other services.
The report from Citizens suggests that these product developments may represent just the initial phases of a more extensive strategy.
Citizens further argues that DraftKings' acquisition of Railbird could be more crucial for the long-term economics of the business than trading volume. Acquired in 2025, Railbird is a CFTC-regulated exchange operator that provides DraftKings with its own exchange infrastructure. Recently, the company announced its new platform name, DKeX, and self-certified various sports-event contracts on it.
Currently, minimal prediction-market volume is processed through Railbird, with most transactions occurring via CME Group and Crypto.com. However, analysts anticipate this will change.
By directing trades through its own exchange, DraftKings stands to benefit from exchange economics in addition to the fees generated from its consumer-facing platform. Citizens described this ownership of the exchange as a form of vertical integration that could enhance DraftKings' overall business model.