How Does DraftKings Make Money? Sportsbook, Casino and the Math

DraftKings makes money by keeping a slice of what people bet. In 2025 it reported $6.05 billion of revenue: $3.83 billion (63%) from its sportsbook, $1.80 billion (30%) from online casino games and $423 million (7%) from daily fantasy sports, lottery and other products, according to its 2025 annual report. It doesn’t charge a fee on your winnings; its edge is built into the odds and the games.

How DraftKings makes money: revenue by product

Source: DraftKings 2025 Form 10-K. Growth rates are our calculation from the reported figures.

2026 has started more slowly. Revenue for the first half was $3.09 billion, up 5.8%, and second-quarter revenue fell 4.6% to $1.44 billion as results went the bettors’ way. DraftKings kept its full-year 2026 guidance of $6.5 billion to $6.9 billion.

How the sportsbook makes money

A sportsbook works like a bookmaker, not a broker. It sets prices so that, across all bets, it pays out less than it takes in.

The classic example is a bet at -110 on both sides of a game, where each bettor risks $110 to win $100. If one person backs each team, DraftKings collects $220 and pays the winner $210, keeping $10. That’s about 4.5% of the money wagered, and it doesn’t matter which team wins.

DraftKings actually kept more than that: its sportsbook margin was 7.1% in 2025, up from 6.0% in 2024 and 5.6% in 2023. The company points to a higher built-in hold, helped by a growing share of parlays, which carry a bigger edge, and to more efficient spending on promotional free bets. Multiply $53.6 billion of handle by 7.1% and you get the $3.83 billion of sportsbook revenue.

The margin isn’t guaranteed in any single quarter. When favorites keep winning, bettors collect. DraftKings said customer-friendly results cut about $80 million from its Q2 2026 revenue, and its sports margin that quarter fell to 6.8% from 8.7% a year earlier.

Does DraftKings take a percentage of winnings?

Not on the sportsbook or casino. If you win a $100 bet, you get the full payout the odds promised. DraftKings’ cut is already priced into those odds, which is why a $100 bet on a 50/50 game at standard -110 odds wins $90.91, not $100.

Daily fantasy works differently: players compete against each other, and DraftKings keeps a share of entry fees, known as the rake. You can work it out for any contest: if 100 people pay $10 each and the posted prize pool is $850, the rake is $150, or 15%. That example is illustrative; rates vary by contest.

That split, a house that takes the other side of your bet versus a marketplace that charges a fee, covers two of the classic types of business models, and DraftKings runs both inside one app. Any tax you owe on winnings goes to the government, not DraftKings.

Online casino: the steadier engine

iGaming means online slots, blackjack, roulette and live dealer tables. It brought in $1.80 billion in 2025, up 20%, even though DraftKings offered it in only five states as of February 2026, covering about 11% of the US population.

Casino games have a house edge built into their rules. Unlike sports, they don’t swing on a few big upsets, so DraftKings doesn’t even track iGaming by handle. That makes it the most predictable revenue the company has.

Fantasy, lottery and prediction markets

Daily fantasy was DraftKings’ original business, years before the Supreme Court let states legalize sports betting in 2018. Today it sits in “Other” alongside Jackpocket, a lottery ticket courier it bought in May 2024, which charges a fee to buy state lottery tickets for you. In early 2026, fantasy entry fees fell and lottery revenue dropped after DraftKings exited the Texas market, partly offset by a new keno offering.

The newest line is prediction markets. DraftKings bought Railbird, a CFTC-registered exchange, in October 2025, and launched DraftKings Predictions on December 19, 2025, in 38 states, including California, Texas, Florida and Georgia, where sports betting isn’t legal. It has since expanded to 48 states and opened its own exchange, DKeX, in June 2026.

Here, customers trade event contracts with each other and DraftKings earns fees. When trades ran through outside exchanges such as CME Group, customers paid both an exchange fee and a DraftKings fee, so running its own exchange should improve the economics.

It’s the same basic model we explain in how Polymarket makes money. Several state regulators argue that sports event contracts break state gambling laws, so this line carries real legal risk.

Does DraftKings make a profit?

Barely, and only recently. DraftKings reported net income of $3.7 million in 2025 on $6.05 billion of revenue, its first profitable year, after a $507.3 million loss in 2024. It swung back to a $67.6 million net loss in Q2 2026.

The Q2 2026 results also showed $115 million of adjusted EBITDA, the measure management prefers because it strips out stock-based pay and other non-cash items. Full-year 2026 guidance is $700 million to $900 million on that basis, including spending on Predictions.

The thin bottom line comes from heavy costs. Cost of revenue, which includes state gaming taxes, payment processing and platform fees, ate 58.7% of revenue in 2025, and the 10-K flags higher tax rates in some states. Marketing to win and keep customers takes another large slice.

Who’s bigger, FanDuel or DraftKings?

FanDuel is bigger. Its owner, Flutter Entertainment, said FanDuel held 39% of sportsbook gross gaming revenue and 27% of iGaming revenue in the states where it operates in Q2 2026, with DraftKings a clear second. Oppenheimer estimated in 2024 that the two together took about 70% of US online sports betting handle, which is why analysts call the market close to a duopoly.

How much does the CEO of DraftKings make?

Co-founder and CEO Jason Robins received about $22.6 million in reported compensation for 2025, according to the company’s March 2026 proxy statement, roughly 85% of it in stock awards. He also controls about 88% of the voting power through special Class B shares, which makes DraftKings a “controlled company” under Nasdaq rules.

The skeptic’s view

DraftKings has proved the model can make money, just. The whole business turns on that 7.1% margin. One percentage point on $53.6 billion of handle is about $536 million of revenue, more than a hundred times its 2025 net income.

That margin depends on parlay mix, promotions, game results and state tax rates. DraftKings can steer the first two and has no say over the last two. Prediction markets widen its reach, but they also drag it into a federal-versus-state legal fight it can’t settle on its own.

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