By Nick Devor

DraftKings reports first-quarter earnings after the close Thursday. Investors should watch how the sports betting titan is handling the opportunities and threats arising from prediction markets.

Wall Street analysts surveyed by FactSet expect adjusted earnings per share of $0.22 and revenue of $1.63 billion.

The stock is down 30% since the beginning of the year, but has traded roughly flat since DraftKings reported fourth-quarter earnings in February. Shares were up nearly 4% late Thursday morning heading into earnings, trading around $25 a share. Wall Street analysts have an overweight rating on the stock, according to FactSet, with an average price target of $34.04.

The threat of prediction markets to sports betting businesses has weighed heavily on the sector. Firms like Kalshi and Polymarket can provide event contracts that closely mimic sports betting in states where traditional sports betting remains illegal, making an end-run around state taxes and regulations that sportsbooks like DraftKings have to abide by. (Polymarket has a data sharing partnership with Dow Jones, the publisher of Barron's.)

Flutter, the parent company of U.S. sportsbook FanDuel, and DraftKings have each started their own prediction market platforms -- FanDuel Predicts and DraftKings Predictions -- in order to compete in the space.

DraftKings' report will come a day after Flutter reported solid earnings, beating analysts' expectations on earnings per share and revenue figures. A key insight from Flutter's report is that the company has begun market making on third-party prediction market platforms.

Prediction markets differ from traditional gambling firms by connecting two opposing bettors, rather than having bettors wager against the proverbial house. By market-making, Flutter becomes a counterparty in certain prediction market trades.

DraftKings has been market-making on its own prediction market since it last reported earnings, and today's report will provide a window into how sportsbooks' strategy around prediction markets is shaping up.

It will also shed light on the ongoing threat of prediction markets to the broader business. Betting firms make more from customers who bet on their traditional sportsbook, and questions around consumer cannibalization remain unanswered.

Write to Nick Devor at nicholas.devor@barrons.com

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May 07, 2026 12:10 ET (16:10 GMT)

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