Why DraftKings’ Railbird Acquisition and Market Making Strategy Could Drive $1 Billion in Annual Prediction Markets Revenue by 2030

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%.

After eighteen years across iGaming and sportsbook operations the pattern is familiar. Operators chase customer acquisition first then layer in the infrastructure that actually scales margins. DraftKings looks to be following the same playbook.

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.

This matches what I have seen on the supplier side. Early stage prediction platforms function more like customer funnels than mature revenue engines. The real economics show up later once the user base stabilizes and the infrastructure matures.

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.

From an operator perspective these moves make sense. You start with simple event contracts then layer on familiar betting mechanics to drive engagement. The question is whether that translation from sportsbook UX to prediction markets actually sticks with sharp users.

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.

This vertical integration angle is worth watching. In my experience across European regulated markets control over the full stack often determines who captures the spread and who simply pays for access.

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.

Here is where the analysis gets interesting. DraftKings’ existing sportsbook risk and trading stack gives it real advantages in pricing sports events compared with pure prediction platforms like Polymarket or Kalshi that rely more on crowd wisdom and liquidity incentives. The question is whether that edge translates into durable liquidity on DKeX or if third-party market makers will still dominate certain contracts.

Risk and Counterarguments

Any projection to $1 billion in annual revenue by 2030 carries obvious risks. The current $108 million May trading volume and $2 million gross revenue illustrate how early the business remains. Promotional spending continues to offset much of the revenue and customer acquisition costs remain high.

Regulatory uncertainty around event contracts adds another layer. Self-certification of sports-event contracts on DKeX is one thing. Sustained CFTC approval and state-level alignment is another. If enforcement tightens the entire market-making thesis could stall.

Competition from pure-play prediction platforms also cannot be ignored. Polymarket and Kalshi have built loyal user bases on simpler interfaces and faster liquidity. DraftKings must prove that its super app integration and sportsbook crossover actually converts rather than confuses.

The 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.

The Bottom Line

DraftKings is positioning itself to move from prediction market front-end to full-stack participant through Railbird ownership and market making. The $184 million EBITDA estimate for third-party market making by 2030 rests on the assumption that its sportsbook trading expertise creates a genuine edge. Operators watching this space should track how quickly volume shifts to DKeX and whether the bid-ask spreads prove sustainable. For those evaluating similar integrations the real test will come during high-volume NFL windows when liquidity demands peak. If the model holds prediction markets could shift from customer acquisition tool to core P&L driver. Teams assessing their own roadmap may want to review SCCG’s advisory work on sportsbook and prediction market strategy.