Citizens argues that Railbird and market making, not today’s trading volumes, could become the most valuable parts of DraftKings’ prediction markets business.
The most valuable part of DraftKings’ prediction markets business may not exist yet. In a research note, Citizens analysts Jordan Bender and Isabelle Slavin argued that the company’s forthcoming Railbird exchange integration and planned market-making operations could ultimately prove more important than the customer growth and trading volume currently driving investor attention.
Those capabilities drive the firm’s forecast that DraftKings could generate approximately $1 billion in annual revenue by 2030. Citizens estimates annual revenue of $907 million at a 20% market share, and up to $1.25 billion at a 30% share.
Based on those market share assumptions, analysts predict that the prediction market business could be worth between $10 billion at 20% market share and $14 billion at 30%.
The assessment comes as DraftKings continues laying the groundwork for that strategy through the expansion of its Predictions platform, the rollout of parlay-style “Combos” contracts, and the planned launch of its DKeX exchange infrastructure.
Today’s Business Is Primarily About Growth
The report argues that the current prediction market volume remains relatively insignificant from an earnings perspective.
DraftKings disclosed approximately $108 million in consumer trading volume during May. Citizens estimates that translates into roughly $2 million in gross revenue at an approximate 2% take rate. The analysts noted that promotional spending likely offset much of that revenue during the period.
Citizens also noted that the company has guided to between $200 million and $300 million of Predictions-related customer acquisition spending during 2026. Based on current acquisition costs and marketing spend, the analysts estimate that DraftKings could add between two and three million new customers this year.
The focus on customer acquisition is consistent with management’s broader strategy. Earlier this year, CEO Jason Robins described prediction markets as a strategic priority and an acquisition tool for users in non-sports betting states.
DraftKings Has Been Expanding The Predictions Ecosystem
DraftKings Predictions looks significantly different today than it did when it launched in December. Initially built around a limited selection of CME Group event contracts, DraftKings has steadily expanded the platform’s capabilities.
In May, the company introduced “Combos,” a parlay-style product built on Crypto.com’s event-contract infrastructure. Executives have also suggested that the company may introduce more popular sports betting-type contracts, such as microbetting.
Additionally, DraftKings also revised its fee structure and integrated Predictions into its broader multi-vertical “super app.” The “super app” includes sports predictions alongside sportsbook, casino, fantasy sports, and other offerings.
The Citizens report suggests those product developments may represent only the early stages of a broader strategy.
Why Railbird Could Change The Economics
Citizens argues that DraftKings’ acquisition of Railbird could be more important than trading volume for the business’s long-term economics.
DraftKings acquired the CFTC-regulated exchange operator in 2025, providing the company with its own exchange infrastructure. Last month, the company revealed the name of its forthcoming platform as DKeX. It also self-certified a series of sports-event contracts on DKeX.
According to the report, little prediction-market volume currently flows through Railbird. Most activity is instead routed through CME Group and Crypto.com.
The analysts expect that to change.
By routing trades through its own exchange, DraftKings could capture exchange economics in addition to the fees generated through its consumer-facing platform.
Citizens described exchange ownership as a form of vertical integration that allows DraftKings to participate in multiple parts of a transaction rather than functioning solely as a front-end application. The report also cited greater control over market creation, liquidity incentives, and product development as potential benefits of owning exchange infrastructure.
Market Making Viewed As The Biggest Opportunity
The strongest language in the report concerns market making.
Market making is the most attractive layer,” the analysts wrote.
Market makers provide liquidity by continuously quoting prices and taking the opposite side of trades, earning revenue through spreads and trading activity.
Unlike many prediction-market operators, DraftKings already employs traders and risk-management teams to price sporting events, manage sportsbook exposure, and respond to news in real time. Citizens argues that those capabilities could provide a natural advantage if the company begins making markets on its own exchange and eventually on third-party platforms.
Under that model, DraftKings would not simply earn revenue from customers placing trades. It could also generate income by providing liquidity and capturing bid-ask spreads across prediction markets. The report estimates third-party market-making activity alone could generate approximately $184 million in EBITDA by 2030.
The analysts said conversations with market makers suggested sports betting operators may be particularly well positioned in sports-event contracts. That’s because they already possess pricing expertise, trading infrastructure, and proprietary models developed through years of sportsbook operations.
NFL Season Could Offer The Next Major Test
Citizens believes the next major milestone for DraftKings Predictions could arrive during football season.
The analysts expect DraftKings to begin routing a larger share of activity through DKeX. At the same time, the company will likely expand market-making operations on its own exchange and, potentially, across third-party venues.
If that occurs, investors may receive their first meaningful look at the business model underpinning the firm’s long-term projections. Currently, much of the attention surrounding Predictions has focused on downloads, customer acquisition, and growth in trading volume.
The Citizens report suggests the bigger question may be whether DraftKings can successfully evolve beyond a consumer-facing prediction platform into a broker, exchange operator, and market maker simultaneously. If it can, analysts believe the business could eventually become one of the company’s most significant growth opportunities.
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