How DraftKings’ CFTC-Regulated Predictions Platform Launch At DraftKings (DKNG) Has Changed Its Investment Story

• Earlier this month, DraftKings launched DraftKings Predictions, a CFTC-regulated standalone app and web platform that lets eligible U.S. customers trade event contracts on sports and financial outcomes across 38 states, with more categories expected over time.
• This move pushes DraftKings into federally regulated prediction markets through a CFTC-registered Introducing Broker subsidiary, broadening its addressable market beyond traditional sports betting and iGaming.
• Next, we’ll examine how DraftKings’ move into CFTC-regulated prediction markets could reshape its investment narrative and long-term growth drivers.

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DraftKings Investment Narrative Recap

To own DraftKings, you need to believe it can turn a fast-growing but still unprofitable online betting business into a sustainably profitable, scaled digital entertainment platform. The launch of DraftKings Predictions potentially adds a new regulated revenue stream and broadens the addressable market, but it does not change the near term reality that the key catalyst is improving profitability and cash generation, while the biggest risk remains rising regulatory and tax pressure on its core U.S. operations.

Among recent announcements, the planned December launch of DraftKings’ mobile sportsbook in Missouri ties most directly into that profitability and scale story. It adds another legalized state to the footprint at a time when DraftKings is already working to improve margins through cost discipline and product innovation, providing more ways to leverage its existing technology, brand, and responsible gaming framework while it experiments with new offerings like CFTC regulated event contracts.

But against this expansion story, accelerating state level tax hikes remain a risk investors should be aware of...

Read the full narrative on DraftKings (it's free!)

DraftKings’ narrative projects $9.5 billion revenue and $1.3 billion earnings by 2028.

Uncover how DraftKings' forecasts yield a $44.81 fair value, a 30% upside to its current price.

Exploring Other Perspectives

Seven members of the Simply Wall St Community value DraftKings between US$30 and about US$94 per share, showing wide disagreement on upside. Set those views against the growing regulatory and taxation risks that could influence how the company converts new products and state launches into sustainable profits.

Explore 7 other fair value estimates on DraftKings - why the stock might be worth over 2x more than the current price!

Build Your Own DraftKings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your DraftKings research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free DraftKings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate DraftKings' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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