Citizens puts $14bn value on DraftKings predictions

• Citizens JMP Securities estimates a 30% prediction market share could add up to $14bn in enterprise value for DraftKings by 2030.
• DraftKings recorded $108M in consumer volume in May 2026, equating to $1.3bn annualized, up 24% month-on-month.
• App downloads were up 249% month-to-date in June, as the company targets 2M to 3M new customers in 2026.

DraftKings’ prediction market business could add between $10bn and $14bn to the company’s enterprise value by 2030, according to a Citizens JMP Securities research note published June 22.

The report argues investors are not yet fully pricing in the scale of the operator’s long-term predictions opportunity.

The market share math

Citizens analyst Jordan Bender maintained a Market Outperform rating on DraftKings (Nasdaq: DKNG) with a $34 price target, applying a revenue multiple derived from Kalshi’s $22bn valuation to model out different prediction market share scenarios for the operator.

At a 20% market share by 2030, Citizens estimates DraftKings Predictions could generate approximately $907M in revenue, implying around $10bn of enterprise value. At 30%, total revenue would reach roughly $1.3bn and EV approximately $14bn. Citizens noted that figure is roughly comparable to DraftKings’ market capitalization as of the report date.

The analysis draws on DraftKings’ June 9 disclosure, which showed consumer volume of approximately $108M in May 2026, or $1.3bn annualized, up 24% month-on-month. Total volume reached $258M ($3.1bn annualized), rising 34% from April. DraftKings stock gained 11% on the day of that announcement, per the Citizens note.

At a 2% broker take rate, May consumer volume translated to roughly $2M in gross revenue. Citizens noted that promotional spending likely offset this entirely in the early months, consistent with a new sportsbook market launch. Promotional intensity is expected to normalize by the second or third month after customer acquisition.

Exchange and market making

DraftKings acquired the Railbird exchange, known internally as DKeX, in October 2025 to accelerate its designated contract market licensing. In May, virtually no volume flowed through Railbird, with order flow directed instead to CME and Crypto.com.

Citizens expects more volume to move through the in-house exchange ahead of the NFL season. Owning the exchange rather than routing orders to third-party venues would allow DraftKings to capture both broker-layer and exchange-layer economics simultaneously, improving margins as volume scales.

The firm identifies market making as the highest-margin layer of the prediction market stack. Citizens projects gross margins near 95% and EBITDA margins of up to 85% for the market-making arm, given a low incremental cost structure.

Long-term, the firm models the company’s effective take rate on consumer volume rising from the current ~2% to between 5.5% and 6%. Third-party market making across external exchanges is estimated to contribute approximately $200M of EBITDA by 2030.

Jason Robins, CEO of DraftKings, set out the company’s ambitions during the Q1 2026 earnings call:

“We have also launched market making, which unlocks access to an additional layer of the value chain. Market making is already generating a positive return for us. In the coming weeks, we expect to launch our proprietary exchange and to begin offering combos. Together, these moves will accelerate innovation, improve the customer experience, and strengthen our economics.”

Customer acquisition scale

DraftKings is budgeting $200M to $300M on prediction market customer acquisition in 2026. Management has cited a customer acquisition cost of roughly $100 per customer despite offering a $200 sign-up bonus, implying a target of between 2M and 3M new customers for the year.

Despite guidance assuming no return on that spending in 2026, Citizens estimates customer cohorts acquired in Q2 and Q3 could generate approximately $28M in contribution profit before year-end. That creates potential upside to current estimates if payback periods track those observed in online sports betting.

According to Citizens, DraftKings app downloads were up 249% month-to-date in June, coinciding with the NBA Finals and the opening of the FIFA World Cup. The company’s super app, introduced in March 2026, merges sportsbook, casino, lottery, and predictions into one platform, giving consumers access to at least one DraftKings sports product nationwide.

DraftKings Predictions itself launched in December 2025 and operates across 17 states representing 41% of the US population. Citizens notes that none of those states currently offer legal online sports betting.

Citizens identifies sports markets as the natural focus for DraftKings’ market-making activity, given the company’s existing trading infrastructure and pricing models. Crypto-native firms are expected to concentrate on crypto-related markets instead, leaving the sports vertical more open to operators with established sportsbook expertise.

The NFL season is the next key test. Citizens expects Railbird volume to grow significantly by kickoff, with market-making activity to follow. How quickly DraftKings Predictions transitions from a broker-only model to a multi-layered revenue stack will determine whether the company captures the upside Citizens has modeled.