DraftKings Stock Has Catalysts, DKeX Self-Certifies Protected NBA Player Props

Ahead of its third-quarter earnings report on Nov. 5, DraftKings (NASDAQ: DKNG) is off 23.5% over the past month, but some analysts believe the stock is a credible rebound candidate.

In a new report to clients, Jefferies analyst David Katz points out that DraftKings’ online sports betting (OSB) trends are solid to start the 2026 NFL season, citing “low-teens year-over-year handle growth” and some state-level data indicating that on the basis of gross gaming revenue (GGR) share, DraftKings (31.8%) is slightly outpacing rival FanDuel (31.5%). Flutter Entertainment (NYSE: FLUT) owns FanDuel.

The analyst reiterated a “buy” rating on DraftKings stock with a $44 price target, implying potential upside of 123% from the Oct. 14 close.

iGaming Lethargy, Earnings Outlook

While improved wagering trends are evident, DraftKings’ third-quarter results and any forward-looking guidance offered up by the company could be tests of investors’ willingness to tolerate elevated promotional spending and prediction market investments.

Katz pared his third-quarter revenue estimate on DraftKings to $1.37 billion from $1.39 billion while trimming his adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast to a loss of $67 million from a loss of $42 million. He says those altered estimates reflect an added $100 million in prediction market investments.

There are also signs of sluggishness in the iGaming arena. While growth in that segment continues outpacing that of OSB, Katz points out that iGaming’s industry-wide growth rate of 16.4% in the second quarter was the lowest quarterly uptick in the U.S. market.

“If realized, 2Q and 3Q would represent the two slowest iGaming growth quarters in the company’s history,” adds the analyst. “Management has highlighted increased focus on the segment, citing encouraging trends from new content and slot-focused promotions. Additional iGaming legalization would be a positive catalyst for shares. DKNG is well positioned as a market leader in any newly regulated U.S. jurisdiction.”

DKeX News

In other DraftKings news, the company’s fast-growing DKeX exchange self-certified what amount to injury protections on NBA player proposition event contracts. That move follows similar action by a rival prediction market operator earlier this month and comes ahead of the start of the NBA regular season on Tuesday, Oct. 20.

Self-certification of event contracts allows exchange operators to bring those derivatives to market, provided the Commodity Futures Trading Commission (CFTC) doesn’t request more information. The practice is common in the prediction market industry.

The DKeX contracts, which could be made available as soon as tomorrow, provide bettors and traders with protection in the event that the wagered-on athlete is injured in the first half of a game and doesn’t return to action.

“This Contract additionally includes a Covered Settlement provision: where [entity] plays in the first half of [event] but not in the second half, and the Payout Criterion is not satisfied, the Contract resolves to the last fair market price prior to the scheduled tipoff of [event], as set forth in Section 2.2, subject to the terms of the contract and market specifications and Chapter 13 of the DKeX Rulebook,” as noted in the contract details.