DraftKings reported second-quarter 2026 revenue of $1.443 billion, down 4.6% from $1.513 billion a year earlier, even as its online casino business continued to expand. iGaming revenue increased 7.5% to $461.9 million from $429.7 million, creating a sharp contrast between steady casino growth and a volatile sports-led top line.
The company attributed the overall decline primarily to customer-friendly sports outcomes and increased promotional reinvestment tied to new customer acquisition in Sportsbook and Predictions. Sports consumer volume still rose 14.5% to $13.1 billion, showing that weaker revenue was not the result of lower betting activity alone.
iGaming Provided the Clearest Growth Signal
Online casino revenue added $32.3 million year on year while sports revenue fell $106.0 million, or 10.6%, to $891.9 million. That divergence matters because iGaming is generally less exposed to the short-term outcome volatility that can move sportsbook hold dramatically from one quarter to the next.
The 7.5% increase also extends DraftKings' position in a limited but valuable set of regulated online casino markets. The company operates iGaming in five US states and, following expansion in Alberta, in Canadian provinces representing roughly 51% of the country's population when its sportsbook and casino reach are considered together.
Sports Volume Grew While Margin Compressed
Sports consumer volume reached $13.14 billion, up from $11.47 billion. Sports net revenue margin declined to 6.8% from 8.7%, explaining why a larger amount wagered produced less revenue. Hold can change with event results, product mix, promotions and the concentration of customer-friendly outcomes.
The quarter is a reminder that sportsbook growth cannot be measured by handle alone. Higher volume can support engagement and long-term customer value, but revenue and adjusted earnings depend on how much of that volume the operator retains after payouts, promotional credits, taxes, market-access costs and other operating expenses.
Customer Numbers Rose but Revenue per Payer Fell
Monthly unique payers increased approximately 9% to 3.6 million, reflecting retention and acquisition across Sportsbook and the Predictions product launched in December 2025. Average monthly revenue per payer dropped 13% to $132, primarily because of sports outcomes and promotions affecting those same products.
Those metrics describe a business attracting more paying customers but monetizing each one less effectively during the quarter. That can be acceptable if promotions create durable customers with attractive lifetime value. It becomes a concern if spending continues to rise without later improvement in retention, margin or cross-product activity.
Predictions Added Opportunity and Investment
DraftKings said its Predictions offering was growing faster than expected and that its Super App was live nationwide. The company sees similarities between Predictions and Sportsbook customer behavior, supporting its view that existing product development and customer-management capabilities can be applied to event contracts.
The opportunity also carries execution and regulatory uncertainty. Prediction markets operate under a different framework from state-licensed sports betting, and sports-related event contracts remain contested by some state and tribal interests. DraftKings must balance rapid product expansion with legal clarity, responsible-gambling controls and disciplined promotional spending.
Adjusted EBITDA Fell Sharply
Adjusted EBITDA declined to $114.6 million from $300.6 million in the prior-year quarter. DraftKings also moved from net income of $157.9 million to a net loss of $67.6 million. The comparison shows that customer-friendly results and reinvestment affected more than the revenue line.
Adjusted EBITDA is a non-GAAP measure and excludes several expenses, so it should be read with operating income, net income and cash flow. Operating loss was $68.2 million compared with operating income of $150.6 million, providing a clear statutory measure of the year-on-year earnings reversal.
Full-Year Guidance Was Maintained
DraftKings kept its 2026 revenue forecast at $6.5 billion to $6.9 billion and adjusted EBITDA guidance at $700 million to $900 million. Management said the core business remained on track to generate approximately $1 billion in adjusted EBITDA, giving it flexibility to invest in Predictions.
Maintaining guidance signals that the company views the second-quarter pressure as manageable within the full-year plan. The wide ranges still leave room for sports volatility. Future results will need to show whether customer acquisition converts into stronger revenue per payer and whether iGaming can keep growing at a steadier rate.
What the Result Means for Online Casino Strategy
The quarter supports the strategic value of iGaming diversification. Online casino revenue rose while sports revenue declined despite higher volume, demonstrating how casino products can reduce dependence on event outcomes. The effect is limited by the small number of US states that currently authorize full online casino play.
Further state legalization would expand the addressable market, but DraftKings cannot assume rapid legislative progress. Near-term growth will depend on market share, customer retention, product quality and cross-selling in existing jurisdictions. Alberta adds another regulated province, while Ontario remains an important competitive Canadian market.
What the Quarterly Mix Says About DraftKings
The contrast between rising sportsbook volume and lower sportsbook revenue is an important reminder that handle is not the same as sales. Handle measures the amount wagered, while revenue reflects the portion retained after customer winnings and before a range of costs. A quarter with strong betting activity can therefore produce weaker revenue when event outcomes favor players, promotional intensity rises or the mix of wagers changes. Investors will need several quarters of data before deciding whether the latest result reflects short-term sports outcomes or a more persistent change in economics.
The online casino result provides a different signal. A 7.5% increase to $461.9 million indicates that iGaming remained a source of expansion even as consolidated revenue declined. Casino games generally create a steadier stream of activity than a sports calendar concentrated around major events, although state availability, taxes, promotions and responsible-gaming requirements still shape profitability. That makes the division strategically useful, but it does not remove the need for disciplined acquisition spending and retention.
Monthly unique payers rose while average revenue per monthly unique payer fell. Together, those figures suggest DraftKings reached more customers but generated less revenue from the average payer during the period. The combination can reflect customer mix, promotional behavior, product engagement or favorable player outcomes. It is not possible to assign the movement to one cause from the headline metrics alone, so the relationship between customer growth and unit economics deserves close attention in subsequent reports.
Management's full-year guidance gives the market a broader reference point than one volatile quarter. Reaching the projected revenue and adjusted EBITDA ranges will depend on execution across products, state markets and the sports calendar. It will also require balancing growth with marketing efficiency. Adjusted EBITDA is a non-GAAP measure and should be considered alongside net income, cash flow and the company's definitions rather than treated as a substitute for them.
Bottom Line
DraftKings' Q2 results were mixed: iGaming revenue grew 7.5% and monthly payers increased, but total revenue fell nearly 5%, sports margin compressed and adjusted EBITDA declined substantially. The company processed more sports activity yet retained less revenue from it during a customer-friendly quarter.
Online casino was the most stable growth engine. DraftKings now needs to show that sports margins can normalize, promotions can produce durable customer value and investment in Predictions will not overwhelm earnings. Maintained guidance suggests confidence, but the second half must convert expanding engagement into stronger revenue and profitability.
