The latest quarterly earnings reports from major players like DraftKings, Flutter Entertainment (FanDuel’s parent), Coinbase, and Robinhood have put the spotlight on the rapidly expanding prediction markets industry. Companies are increasingly investing in these platforms, with DraftKings reporting massive volume growth, Coinbase seeing significant revenue increases, and Robinhood’s new Rothera exchange quickly capturing market share. While regulatory scrutiny remains a challenge, the financial results underscore Wall Street’s growing commitment to this burgeoning sector.
The latest round of quarterly earnings reports has cast a bright spotlight on a rapidly expanding sector: prediction markets. Major financial players like Flutter Entertainment, parent company of FanDuel, along with DraftKings and others, are increasingly showcasing their stakes in this burgeoning industry.
According to Joel Shulman, CEO of investment firm Entrepreneur Shares, a growing number of companies are either launching their own prediction market platforms or forging strategic partnerships within the space. As competition intensifies, recent financial disclosures offer crucial insights into just how much these firms are betting on the future of prediction platforms.
DraftKings' Platform Sees 'Explosive' Growth
DraftKings CEO Jason Robins highlighted the astounding pace of growth for the company's prediction market platform, initially launched in December 2025. "We've already engaged over 600,000 customers with our predictions offering, and I anticipate this will explode into millions during the upcoming NFL season. We are very excited about it," Robins shared on CNBC's "Squawk Box."
On their earnings call, Robins further detailed that annualized total volume for DraftKings' prediction platform surged from $2.3 billion to an impressive $11 billion between April and July. He also noted that other prediction market operators haven't significantly impacted DraftKings' business, largely because they cater to different audiences.
"We observe only about a 1% customer overlap between our sportsbook and the largest prediction market operator in sportsbook states. This suggests these platforms attract a distinct, largely professional audience," Robins explained. Internal DraftKings data indicates that 80% to 90% of prediction market consumer volume originates from betting syndicates and institutional traders. Robins emphasized that owning all three critical layers of prediction markets—brokerage, exchange and market maker—provides DraftKings with a competitive advantage.
Despite this growth, DraftKings' second-quarter adjusted EBITDA of $114.6 million and revenue of $1.44 billion both fell short of FactSet's consensus estimates of $156.1 million and $1.51 billion, respectively.
FanDuel Predicts Shifts from CME to Crypto.com
Shares of Flutter experienced a significant drop, closing down over 11% on Wednesday, following the announcement that Dan Taylor, CEO of Flutter's international division, would replace Peter Jackson as the company's head. Second-quarter earnings reported that day also missed Wall Street's projections.
Furthermore, Flutter revealed it would be relocating its FanDuel Predicts sports and novelty contracts from CME to Crypto.com. While CME will continue to handle financial market contracts, this move aims to accelerate product delivery. "This new exchange arrangement will allow us to roll out new products quickly, well in advance of the NFL season start," Jackson stated on the company's earnings call. FanDuel Predicts initially launched with CME in December 2025, shortly after platforms like Kalshi and Polymarket saw a boom in volume.
Regulatory concerns are also a primary focus for Flutter, especially as Kalshi and Polymarket have faced scrutiny from state regulators who argue their operations constitute illegal gambling. Over 40 state attorneys general have challenged the Commodity Futures Trading Commission's assertion of exclusive regulatory authority over sports-related event contracts. Jackson highlighted that FanDuel Predicts has a smoother operational pathway in various states, allowing the company to "acquire customers ahead of sports betting regulation in new states."
Flutter reported second-quarter adjusted earnings of 49 cents per share on revenue of $4.33 billion, missing the FactSet consensus of 54 cents per share but surpassing the $4.23 billion revenue forecast. The company anticipates generating approximately $50 million in market-making revenue this year.
Coinbase Signals Robust Prediction Market Growth
Crypto exchange giant Coinbase announced in late July a remarkable 106% quarter-over-quarter growth in its prediction markets revenue. The annualized revenue from this segment in the second quarter exceeded $100 million.
However, these figures did not uniformly impress analysts. KeyBanc analysts noted in their report, "Prediction markets run rate of $100M+ in 2Q was below our estimate." Coinbase's overall second-quarter results were disappointing, with a wider-than-expected loss of $1.36 per share, against an LSEG-polled analyst expectation of a 17-cent loss. Revenue also fell short, coming in at $1.2 billion compared to the $1.3 billion forecast.
Robinhood's Rothera Rollout Makes Its Mark
In June, Robinhood introduced Rothera, an exchange licensed by the CFTC and managed through a joint venture with Susquehanna International Group. Robinhood's second-quarter report indicated that over 3.5 billion contracts have been traded on Rothera to date, contributing $156 million in event contracts revenue.
Rothera founders Tom Chippas and Matt Trudeau proudly shared on LinkedIn on August 4, "In less than two months since launch, we secured approximately 7-8% of total market share among CFTC-regulated venues and roughly 30% average market share compared with the largest market in the specific contracts we listed." They cited these volume figures as compelling "evidence" of their technology and operations' capability to perform under substantial pressure and at significant scale.
Disclosure: CNBC and Kalshi maintain a commercial relationship that includes customer acquisition and a minority investment.
