DraftKings' CEO Says the Stock Would Rise if the Supreme Court Killed Prediction Markets. He Also Says He'd Rather They Lived

Jason Robins spent Tuesday afternoon on a webinar with Wells Fargo's Trey Bowers explaining why DraftKings is fine. Then he said this:

"It's funny because, if you asked me, I would say I'd rather see them stay, but I would also guess that if prediction markets got shut down by the Supreme Court tomorrow, our stock price would pop."

It is the most candid sentence a sportsbook executive has produced on this subject all year, and it is worth sitting with, because it contains a contradiction that Robins did not try to smooth over. He would prefer prediction markets survive. He believes his shareholders would throw a party if they died. Both of those things are true at once, and the reason they are both true is the entire strategic picture of the American betting industry right now.

The numbers behind the shrug

Robins came with evidence, and it is good evidence.

DraftKings' prediction volume is running at nearly 2.5 times its July level. More than a million customers have used the product. Combo trades are about 30 per cent of NFL Sunday activity on it. Meanwhile the thing prediction markets were supposed to be eating — the licensed sportsbook — grew handle 15 per cent to open the NFL season, with parlay mix up 300 basis points. The company is still pointed at roughly $1 billion of adjusted EBITDA for 2026 and a long-term margin around 30 per cent.

"I certainly don't think there's a lot of reason to believe the economics will be worse," he said. And: "We have the best product in the market."

That is a CEO describing a business that has not been cannibalised. Fifteen per cent handle growth is not what disruption looks like from the inside.

So why would the stock pop?

Because the equity market is not pricing the current quarter. It is pricing the shape of the industry in 2029.

The bear case on DraftKings has never been that Kalshi steals this season's parlay handle. It is that a federally regulated venue can offer sports event contracts in all fifty states without a state licence, without a state gaming tax, and without the state-by-state promotional restrictions that DraftKings spends enormously to comply with. New York takes 51 per cent of gross gaming revenue. A CFTC-regulated exchange pays none of that. If that structure is permanent and it scales, then DraftKings' most valuable asset — an expensively assembled, heavily taxed licence portfolio — is revalued as a liability, and every competitor with a CFTC registration starts from a cost base the incumbent cannot match.

Kill that scenario at the Supreme Court and the overhang lifts. The stock pops. Robins is not describing his P&L; he is describing a discount rate.

Which is exactly why the second half of his sentence matters more than the first. He would rather they stayed. Of course he would. DraftKings now runs one. A world with prediction markets is a world where DraftKings can sell to Texas, California and Georgia — states where it has no sportsbook and no realistic path to one. That is not cannibalisation. That is a map.

The hedge is finished

Here is where this stops being an earnings-call anecdote.

DraftKings and Flutter's FanDuel committed a combined $600 million to marketing prediction markets in 2026 — roughly $300 million each, with DraftKings disclosing the number on its Q1 call and Flutter matching inside forty-eight hours.

They did not arrive at the same speed. When FanDuel Predicts went live in December, it opened in five states — Alabama, Alaska, South Carolina, North Dakota and South Dakota — against DraftKings' thirty-eight, with Flutter guiding to $40-50 million of fourth-quarter EBITDA cost and CME Group taking half of gross revenue. DraftKings went wide immediately; FanDuel bought an option and waited. Nine months on, both are committed, and the question of who moved first has stopped mattering. The two companies that between them own most of the American sports-betting customer have now bought insurance on both outcomes.

If the exchanges win, the incumbents already have exchange products, a million-plus users, and the best distribution in the industry. If the exchanges lose, the incumbents keep a licensed near-duopoly and shed a competitor. Three hundred million dollars is a rounding error against a $1 billion EBITDA base, and it purchases genuine indifference to a constitutional question.

That indifference is the news. For two years the argument over whether the Commodity Exchange Act preempts state gaming law has been carried by two sets of people with everything at stake: the exchanges, which die if they lose, and state attorneys general, who are defending their statutes. The best-capitalised participants in the industry have now removed themselves from the fight by making sure they cannot lose it.

The state of the actual law

The legal question Robins is shrugging at is genuinely live, and closer to resolution than it has been.

On August 28 the Ninth Circuit held, in No. 25-7516, that the Commodity Exchange Act "likely does not preempt Nevada's gaming regulations as applied to Kalshi's sports event contracts," treating the contracts as sports bets rather than swaps. The panel was unanimous. In April the Third Circuit had gone the other way, telling New Jersey it could not regulate Kalshi. A CFTC spokesman, Zach Fulton, said the Ninth Circuit had "invent[ed] a new and atextual exception to the CEA."

Two federal appellate courts, opposite answers, same statute. That is the classic profile of a case the Supreme Court takes.

The strongest counterargument

The obvious objection: Robins is a public-company CEO on an analyst webinar, and "we win either way" is what every public-company CEO says about every threat. Treating it as a revelation is naive. He has to project confidence. The $600 million is a real cash cost, and a company genuinely indifferent to an outcome does not spend $300 million preparing for it.

That objection is fair on the first point and wrong on the second, and the reason is the direction of the tell. Executives spin toward optimism about their core business. Robins did the opposite: he volunteered that his shareholders would cheer the destruction of a product line he is personally spending $300 million to build. That is not a talking point. Nobody workshops that sentence. It slipped out because it is what he actually thinks, and he flagged it himself — "it's funny because."

On the spend: $300 million is precisely the price of indifference. You do not buy a hedge because you are scared. You buy it so you can stop being scared, and then you go on a webinar and sound relaxed.

What we do not know

We do not know whether DraftKings' prediction users are new customers or its existing sportsbook customers moving across, and that distinction determines whether the 15 per cent handle growth means what Robins implies. He did not break it out and Covers did not report it. Until DraftKings discloses overlap, a million prediction customers could be a million incremental accounts or a million people it already had.

We also do not know how big DKeX actually is relative to the venue it is hedging against. On September 13, DraftKings' exchange did $137.7 million in a day. Kalshi did $3.17 billion on September 20. Those are not the same order of magnitude, and a hedge that small only works if distribution beats liquidity.

Editor's note: TrueEdge builds odds and pricing tools and earns affiliate commissions from licensed sportsbooks, DraftKings among them. This piece is broadly unflattering to DraftKings' posture and broadly sympathetic to the exchanges' legal position, which runs against that commercial interest rather than with it — but readers should know the relationship exists either way. We have argued that federally licensed exchanges should not be criminalised, and nothing here changes that.