DraftKings drops 28% on earnings miss as Senator Warren probes prediction markets
DraftKings shares fell as much as 28% on Friday, November 6, after the company more than doubled its 2026 prediction-markets spending and guided 2027 adjusted EBITDA below Wall Street expectations. Senator Elizabeth Warren has turned scrutiny toward prediction markets, the product DraftKings has bet heavily on. Analysts now forecast $8.9 billion in revenue and $909.3 million in earnings. The CEO described the company as in a 'win-win position' on prediction markets despite the crash.
DraftKings' 28% plunge turns prediction markets from a growth narrative into a balance-sheet threat that rivals now track as a warning signal. FanDuel Predicts is burning comparable cash with minimal US adjusted EBITDA against its own revenue target, so neither leader has proven the model pays back.
Investors are now pricing in the risk that both platforms spend through a regulatory overhaul that never arrives, or arrives too late. Bank of America has already warned that the pivot may pressure margins more than bulls expect. The first to show sustainable unit economics wins data partnerships and regulatory air cover; the other risks becoming a case study in overspend. Every quarterly loss narrows that window.
Fifth consecutive DraftKings earnings-driven selloff in recent coverage, each progressively steeper as prediction-market spend rises and profit guidance falls, with Bank of America and UBS now joining the downgrade chorus.