On what appeared to be a good news day for DraftKings following the announcement of a multi-year deal with media giant ESPN, there was a cautionary note contained in the sportsbook’s Q3 2025 report.
For the three months ending September 30, the gaming company posted revenue of $1.144 billion, a 4% increase on the $1.095 billion generated in the same period last year.
But while that was among the highlights in DraftKings’ report for the third quarter 2025 results, the business also recorded a net loss of $257 million and concluded its financial outlook by shaving its annual revenue guidance for the year.
There had been an increasing amount of stock price misery for both DraftKings and FanDuel ahead of their Q3 earnings calls, with DraftKings (DKNG) dropping from its year-to-date high of $53.49 on February 14 to closing at $27.98 on Thursday (November 6).
CEO and co-founder Jason Robins laid out a more positive future in the company’s earnings call on Friday (November 7), confirming that it would soon be in a position to offer sports prediction markets.
DraftKings To Offer Sport Prediction Markets
“We are excited about our pending launch of DraftKings Predictions and its potential to expand our total addressable market in the coming months,” he said.
“We expect DraftKings Predictions to enter many new states with sport event contracts, unlocking a new customer base and revenue stream.”
DraftKings is presently legislated to offer mobile sports betting in 25 US states and Washington DC, reaching around 49% of the nation’s population.
Events contracts are federally legislated and as such are available everywhere in the country.
DraftKings purchased exchange Railbird on October 21 to help facilitate its entry into the trading space.
“Nearly half the country’s population remains without access to legal online sports betting,” Robins said.
“But there are several other companies offering federally regulated predictions in all 50 states as growth in predictions continues.
“This may also motivate more states to legalize online sports betting and iGaming with reasonable regulation and taxation.”
DraftKings Revised FY2025 Guidance
Although recording a net loss of $257 million for the quarter, iGaming revenue had increased by 25% from $361.4 million last year to $451.3 million.
Sportsbook revenue showed a drop of 9.3% to $596.1 million, but the category still held strong for the nine months ended September 30 amounting to $2.475 billion, a healthy 19.2% year-on-year increase.
After reporting record Q2 revenue of $1.5 billion in August, DraftKings had maintained its revenue guidance of $6.2 billion to $6.4 billion with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance of $800 million to $900 million.
That has now been revised to fiscal year 2025 (FY2025) revenue of $5.9 billion to $6.1 billion with adjusted EBITDA of $450 million to $550 million.
That outlook is likely to have considered two major plays which DraftKings is expected to make before the year’s end.
Online gambling goes live in Missouri on December 1 and DraftKings has been awarded an untethered license to operate in the state, meaning it can launch its mobile product without needing to be tied to a land-based casino or professional sports team.
It is also fine tuning its first step into the world of events contracts, as it prepares to launch DraftKings Predictions.
Robins sees these as hugely positive indicators, along with an additional update that October’s sportsbook handle showed a 17% year-on-year increase.
“This is the most bullish I have ever felt about our future,” he said.
“Underlying growth in the business is accelerating, and we are excited to launch DraftKings Predictions in the coming months, which we view as a significant incremental opportunity.”
DraftKings Seals Sportsbook Deal With ESPN
Having been seen as a main rival to ESPN Bet, DraftKings is to become the global sports media company’s biggest ally.
Just ahead of yesterday’s financial announcements it was revealed that ESPN had dropped PENN Entertainment and named DraftKings as its new sportsbook partner.
Although there were no financial details given around the multi-year deal, the collaboration is due to kick-off on December 1 with DraftKings’ products being integrated into ESPN’s ecosystem.
Heralding the news, Robins said: “ESPN’s unmatched visibility across the world of sports make this collaboration a natural fit.
“As an innovative leader in digital sports entertainment, DraftKings is uniquely positioned to integrate our technology and products with ESPN’s iconic brand and storytelling power.”
