Prediction Markets Reignite Sportsbook Spending Battle Ahead of NFL Season
DraftKings, FanDuel, and PENN Entertainment revealed sharply different strategies for prediction markets on Q2 earnings calls, but all point to a costly spending war before NFL kickoff.
Sportsbook operators are gearing up for another expensive fight for bettors, and this time prediction markets are throwing gasoline on the fire. Second-quarter earnings calls from DraftKings, FanDuel parent Flutter Entertainment, and PENN Entertainment revealed a fractured industry approach to prediction markets, but a shared conclusion: spending is about to spike heading into the NFL season.
PENN Entertainment CEO Jay Snowden, whose company has not launched its own prediction market platform, warned that larger competitors are preparing for “very aggressive, irrational” marketing spend as the category adds a new front to the battle for customers. PENN has instead pulled back on acquisition spending for bettors it views as unlikely to deliver long-term value, putting the company at odds with rivals racing to scale up prediction volume before kickoff.
DraftKings Leans Into Predictions Growth
DraftKings’ numbers help explain why competitors are willing to spend. The company said customer acquisition jumped nearly 75% year-over-year in the second quarter while sports-consumer volume, which includes both sportsbook handle and prediction market activity, rose 15%. More than 600,000 customers have used DraftKings’ prediction product so far in 2026, with annualized trading volume climbing roughly fivefold between April and July.
DraftKings CEO Jason Robins said the company plans to invest an incremental $200 million to $300 million into its predictions business this year. Robins also pointed to data suggesting the two products aren’t cannibalizing each other — customer overlap between DraftKings’ sportsbook and the leading prediction market operator sits at only about 1% in states with legal sports betting. The company estimates 80% to 90% of prediction market volume in those states comes from professional syndicates and institutional traders rather than the recreational customers that make up the bulk of sportsbook business.
FanDuel Eyes Unregulated States
FanDuel’s strategy centers on geography as much as customer type. The nation’s No. 1 sportsbook operator by market share views its prediction market as a way to acquire customers in states without legal online sports betting, potentially building brand loyalty ahead of eventual legalization. FanDuel is also increasing what it calls “customer generosity” within FanDuel Predicts and projects roughly $50 million in prediction market-making revenue for 2026 — a sign of how quickly the category has become part of operators’ broader financial planning.
Collectively, the country’s leading online gaming operators are projecting more than $500 million in combined lost adjusted EBITDA tied to investing in and marketing their prediction market platforms, according to reporting on the earnings calls. That level of spending mirrors the early days of legal sports betting’s U.S. expansion, when operators burned through promotional dollars to build market share before turning attention to profitability.
What It Means Heading Into NFL Season
The stakes are rising because prediction markets like Kalshi and Polymarket have already built a liquidity head start on NFL markets, while sportsbook-linked products such as DraftKings Predictions and FanDuel Predicts are set to compete across a full football season for the first time. That expanded competition, layered on top of traditional sportsbook promotions, points toward a marketing environment this fall that could rival the early boom years of legalized sports betting.
For bettors, the renewed spending war is likely to translate into more aggressive sign-up offers and promotions across both traditional sportsbooks and prediction market apps in the weeks leading into Week 1. Anyone comparing offers should check the latest DraftKings promo code and Kalshi promo code deals before the season kicks off, as operators look to lock in new customers before the football schedule heats up.
Whether that spending proves sustainable is another question. PENN’s more conservative posture suggests not every operator believes the payoff will justify the cost, setting up a natural experiment in customer acquisition strategy that should become clearer as NFL betting and prediction market volume ramp up together this fall.