By Nick Devor

Sports-betting firm DraftKings is beginning to see the upside of its investment in prediction markets.

The company reported in an SEC filing that annualized consumer trading volume on DraftKings Predictions rose 24% month over month to $1.3 billion, while annualized total trading volume increased 34% to $3.1 billion, compared with April 2026.

The filing notes that those are preliminary numbers based on internal data, and subject to change. Regardless, shares of DraftKings were soaring on the news, trading around $27, up as much as 11% early Tuesday.

DraftKings stock has been pummeled over the past year by sector headwinds and the threat of prediction-market firms like Kalshi and Polymarket, which offer federally-regulated event contracts that closely resemble sports bets but are available across the country to anyone over the age of 18 without being subject to state gambling taxes.

Polymarket has a data-sharing partnership with Dow Jones, the publisher of Barron's.

To compete with the upstarts, DraftKings and its closest competitor, Flutter-owned FanDuel, each launched their own prediction markets -- no small undertaking. Each firm had to acquire a regulated futures exchange and develop a brand new offering.

Doing so weighed on earnings, and the investment isn't set to pay off for a while. When it reported first-quarter earnings last month, Flutter said that revenues from FanDuel Predicts were "non-material," and the company did not include any prediction market revenue in its outlook for the remainder of the year.

But the sportsbooks have an advantage over Kalshi and Polymarket: years of experience marketing sports betting to new customers. Since prediction markets are legal nationwide, the sportsbooks have an opportunity to onboard customers in populous states that haven't legalized traditional sports betting, such as Texas and California.

So far, Wall Street likes what it's seeing. "We view prediction markets as a large, early-stage opportunity that expands the addressable market, with meaningful upside potential over time but limited reliance in the near term," TD Cowen analysts wrote in a research note on Monday. The analysts maintain a Buy rating on the stock, with a price target of $30.

Still, DraftKings has a long way to go before its predictions product catches the prediction-market pure plays: According to Dune, Kalshi saw $10.4 billion in sports trading volume in May.

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

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(END) Dow Jones Newswires

June 09, 2026 11:42 ET (15:42 GMT)

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