DraftKings and Flutter Entertainment, parent of FanDuel, have formally entered the market-making side of prediction markets, according to their Q1 2026 earnings disclosures. The shift from consumer-facing sportsbooks to liquidity providers represents a structural change for an industry that built its regulatory identity on peer-to-peer trading without an operator on the other side of the bet.
Key Financials and Strategic Moves
DraftKings reported Q1 revenue of $1.6 billion, up 17% year-over-year, with adjusted EBITDA of $167.85 million. CEO Jason Robins told analysts on the May 8 earnings call that he sees “no reason” DraftKings should not become one of the “top two or three market makers in the world,” leveraging the Railbird exchange acquired in October 2025. Robins characterized early market-making work as one of the company’s fastest paths to profitability.
Flutter recorded Q1 revenue of $4.304 billion, but U.S. adjusted EBITDA fell 26% year-over-year to $119 million, reflecting its $300 million full-year investment in FanDuel Predicts and $35 million in Arkansas launch costs. CEO Peter Jackson revealed that Flutter “began market-making services on a major third-party prediction platform in April,” while simultaneously building its own in-house prediction exchange expected to launch in the coming months.
The same day as the earnings release, Flutter disclosed that Amy Howe had left as FanDuel CEO, with a separation agreement finalized May 5 and a severance package totaling $4.4 million. President Christian Genetski has taken over FanDuel leadership, while Dan Taylor, formerly CEO of International, was appointed to the newly created role of President at Flutter.
Different Paths, Same Destination
DraftKings is pursuing an integrated approach by using its own exchange (Railbird) for market-making, giving it full control over order flow and data. Flutter, by contrast, is first providing liquidity to an external platform while developing its own exchange in parallel. This dual-track strategy reduces upfront risk but means Flutter temporarily lacks full control over user experience and data.
Regulatory Implications and Crypto Parallels
Prediction markets like Kalshi and Polymarket have long argued to regulators that they are peer-to-peer venues with no house on the other side of trades, a key distinction from gambling. As sportsbook operators move into liquidity provision, that argument weakens. The situation mirrors crypto derivatives markets, where firms like Susquehanna International Group and Jump Trading already serve as market makers, with sportsbook operators now entering structurally similar territory.
The next major regulatory checkpoint is the Senate Commerce Subcommittee hearing on sports integrity scheduled for May 20. American Gaming Association CEO Bill Miller will appear alongside Patrick McHenry of the Coalition for Prediction, where the blurring line between operator and platform will likely face scrutiny.