Draftkings and Flutter Entertainment have both moved into market-making on prediction-market platforms, escalating from consumer-facing products into the financial infrastructure of an industry that built its identity on peer-to-peer trading. The Q1 2026 earnings disclosures establish that the sportsbook industry’s bet on prediction markets has moved well beyond app launches.
Key Takeaways from Earnings
- Draftkings CEO Jason Robins eyes “top two or three” global market-maker spot via the Railbird exchange.
- Flutter began market-making for a major third-party prediction platform in April; own platform launches soon.
- Flutter cut FY 2026 guidance to $18.305B revenue; Draftkings maintained its $6.5–6.9B FY range.
Sportsbooks Move From Prediction-Market Products to Infrastructure
Draftkings reported Q1 2026 revenue of $1.6 billion on May 7, up 17% year-over-year, with an adjusted EBITDA of $167.85 million. CEO Jason Robins identified market-making capabilities and a proprietary exchange as core pillars of the company’s prediction-markets strategy, stating that Draftkings intends to “establish a leadership position in Sports Predictions before year-end.” On the earnings call the following day, Robins told analysts he saw no reason Draftkings should not become one of the “top two or three market makers in the world,” and characterized the early work in this field as one of the company’s fastest paths to profitability. The market-making operates on Railbird, the prediction-markets exchange Draftkings acquired in October 2025.
Flutter Entertainment, Fanduel’s parent, reported Q1 2026 revenue of $4.304 billion on May 6. US Adjusted EBITDA fell 26% year-over-year to $119 million, reflecting Flutter’s $300 million full-year 2026 investment in Fanduel Predicts and $35 million in Arkansas state-launch costs. CEO Peter Jackson explained on the earnings call that the company “began market-making services on a major third-party prediction platform in April.” Flutter is providing liquidity on someone else’s exchange first while building its own platform in parallel, with the initial in-house phase expected to launch in the coming months. The same day as the earnings release, Flutter disclosed that Amy Howe had left her role as Fanduel CEO, with a separation agreement finalized May 5 and a severance package totaling $4.4 million. President Christian Genetski has taken over leadership of Fanduel, while Dan Taylor, formerly CEO of International, was appointed to the newly created role of President at Flutter.
Undercutting the Peer-to-Peer Narrative
Prediction markets have positioned themselves to regulators and the public as peer-to-peer venues with no operator on the other side of the trade, with the goal of shielding platforms like Kalshi and Polymarket from being classified as gambling. As sportsbook operators move onto the liquidity-provision side, that argument grows harder to sustain. The capability also represents a crypto-derivatives parallel: firms like Susquehanna International Group and Jump Trading already operate as market-makers across crypto derivatives venues, with the prediction-markets expansion bringing sportsbook operators into structurally similar territory.
Regulatory and Strategic Outlook
The May 20 Senate Commerce Subcommittee hearing on sports integrity will be the next major regulatory checkpoint. American Gaming Association CEO Bill Miller is set to appear alongside Patrick McHenry of the Coalition for Prediction, with the operator-versus-platform line increasingly difficult to draw cleanly. Flutter’s FY 2026 revenue guidance of $18.305 billion reflects cautious optimism, while Draftkings held its range at $6.5–6.9 billion. The two companies’ contrasting strategies—Draftkings’ direct ownership of the exchange versus Flutter’s dual-track approach—will likely shape the competitive landscape. As prediction markets evolve from a niche peer-to-peer ecosystem into a major arena for institutional liquidity providers, regulators and market participants alike must grapple with the blurring lines between gambling, derivatives trading, and event-based speculation.