DraftKings enters new phase with Kalish exit, prediction markets launch
Summary
DraftKings is entering a transition period as co-founder and president Matt Kalish will step down from his executive role on 31 March 2026, remaining on the board as a director. The company is preparing to roll out a prediction markets product, DraftKings Predict, after acquiring Railbird Exchange. The Railbird deal cost $48.6m upfront (about $19.9m cash and 0.9m shares) with up to $200m in additional consideration.
Alongside product moves, DraftKings has signed new media partnerships — most notably a multi-year deal with ESPN effective 1 December — and expanded its share repurchase programme from $1bn to $2bn. Q3 results showed revenue of $1.14bn (missing estimates), an adjusted EBITDA loss of $126.5m and a downward revision to full-year 2025 guidance. CEO Jason Robins remained bullish about the company’s long-term prospects despite the quarterly miss.
Key Points
- Matt Kalish will leave his president role effective 31 March 2026 but will stay on the DraftKings board as a director.
- DraftKings acquired Railbird Exchange for $48.6m up front and plans to launch DraftKings Predict in the coming months.
- DraftKings intends to offer prediction-market sports contracts only in states without legal sports betting and is engaging with state regulators.
- New media deals include a multi-year partnership with ESPN (effective 1 December) and a multi-year advertising partnership with NBCUniversal; the Penn Entertainment marketing agreement will be mutually terminated.
- Q3 highlights: 3.6m monthly unique payers (MUPs); ARPMUPS $106; revenue $1.14bn (missed consensus); adjusted EBITDA -$126.5m; guidance for FY25 lowered (midpoint revenue ~ $6bn, EBITDA midpoint $500m).
- Board authorised increasing buyback programme from $1bn to $2bn; DraftKings has purchased 9.3m shares so far.
- DraftKings paid a $10m settlement related to its Reignmakers NFT product earlier this year; share price is down ~27% over 12 months (about $28 at noon ET on the Friday referenced).
Why should I read this?
Quick version: big-name exec leaving, a proper prediction-market push is coming, and DraftKings just locked in heavy media deals. If you follow sports betting, media partnerships or market structure shake-ups, this one’s worth a skim — we did the legwork so you don’t have to.
Context and relevance
This story matters because DraftKings is moving beyond being just a sportsbook operator. The Railbird acquisition and DraftKings Predict signal a move into prediction markets — a product class that’s creating regulatory and competitive debate across the US. The ESPN partnership gives DraftKings deeper distribution and marketing integration, while the earnings miss and reduced guidance show near-term pressure from unfavourable sports outcomes.
For investors and industry watchers, the combination of strategic M&A, new distribution deals and a buyback boost is a mixed signal: long-term growth opportunities versus short-term profitability headwinds. Regulators and state-by-state legality will be key to how widely DraftKings can deploy prediction-market contracts.
Source
Source: https://igamingbusiness.com/sports-betting/draftkings-kalish-departure-q3-earnings/