DraftKings' DKeX converts 6% of October consumer volume into net revenue, EKG says

DraftKings' prediction market exchange, DKeX, turned 6% of consumer volume into net revenue in October, putting it close to the margin of the company's sportsbook, according to Eilers & Krejcik Gaming (EKG) analyst Brad Allen. The exchange is about six months old.

For affiliates and operators, the figures could offer an early read on how prediction market economics compare with sports betting, as DraftKings plans heavy spending on the product.

What happened

Allen set out the figures in a new EKG report, covered by Casino.org. DKeX recorded $56.8bn in annualised total trading volume in October. Consumer volume, which Allen describes as a handle equivalent, was $10.1bn. He said the gap between the two amounts to 5.6x, separating headline exchange activity from underlying customer staking.

Allen said DraftKings turns 7.3% of that consumer volume into gross revenue via fees and market-making. After promotions, 6% of consumer volume becomes net revenue.

He set that against the operator's wider sports unit, whose net revenue margin was 7.3% for the first six months of 2026 and 6.7% for the nine months of the year.

Allen said prediction markets may be producing revenue per dollar of customer activity that is not far off traditional sportsbook levels.

Casino.org reported that DraftKings chief executive and co-founder Jason Robins told an industry event for prediction markets that DKeX, an in-house exchange, has moved up to third among prediction market exchanges.

Why it matters

Operators weighing their own event-contract products could use the reported figures as a benchmark for revenue per dollar of customer activity. Teams modelling the segment should check whether they are comparing consumer volume, which is the basis for Allen's margins, or headline trading volume. The two differ by a factor of 5.6 on DKeX.

The gap between gross and net margin could also show how much promotional spend weighs on the product. DKeX converts 7.3% of consumer volume into gross revenue but 6% into net revenue after promotions. Affiliates and media buyers could see operators adjust incentive budgets between sports betting and prediction markets as margin data becomes clearer.

The margin data could bear on investor sentiment about DraftKings' spending plans. When the company reported third-quarter results, it guided to adjusted EBITDA investment of between $650 million and $700 million for DraftKings Predictions. Casino.org reported that the stock fell on that news but has since recovered part of the decline. Casino.org's reading is that rising margins and market-making revenue may point to a long-term contribution from the event contracts business.

The regulatory backdrop remains a variable. Casino.org noted that a Supreme Court ruling on the status of sports event contracts could bring clarity. Operators and affiliates with prediction market exposure could need to monitor the court's handling of the issue, as it might affect product availability and marketing plans.

What's next

The figures come from a single analyst report covering October exchange activity. They are not a full-year result, and the comparison is with the sports unit's first-half and nine-month margins.