ドラフトキングス（DKNG）2026年第3四半期決算説明会：予測関連支出がガイダンスを再編

要点

• ドラフトキングスが発表した2026年第3四半期売上高は前年同期比16%増の13億3000万ドルとなった。月間ユニーク有料ユーザー数が13%増の410万人に拡大し、月間ユニーク有料ユーザー当たり平均売上高が3%増の109ドルに上昇したことが寄与した。
• 調整後EBITDAはマイナス3億1700万ドルとなり、主に予測事業への投資拡大が響いた。ドラフトキングスは2026年度通期の予測事業への予想投資額を6億5000万〜7億ドルに引き上げた。
• スポーツブックの純売上高は、取扱高が12%増加したことで36%増となった。純売上高マージンは約120ベーシスポイント拡大して6.4%となり、パーレイ比率は300ベーシスポイント上昇した。
• ドラフトキングスは2026年度通期の業績予想を売上高63億5000万〜65億5000万ドル、調整後EBITDA 1億7500万〜2億7500万ドルへと下方修正した。主に予測事業への支出、iGamingへの追加投資、およびスポーツの試合結果が顧客有利に振れたことが要因。
• 2027年度について、経営陣は売上高73億5000万〜77億5000万ドル、調整後EBITDA 8億〜10億ドルのガイダンスを示した。予測事業の売上高は6億5000万〜7億5000万ドルに達する見通し。
• 規制動向の行方は依然として最大の不確実要素である。経営陣は2026年の予測事業の顧客コホートの投資回収期間は約20カ月になると説明し、スポーツイベント契約が2028年7月に終了するシナリオをモデル化した。

主要財務データ

事業および営業実績

予測事業

年初来で160万人を超える顧客がドラフトキングスの予測市場サービスを利用した。経営陣によると、新規獲得顧客の継続率およびエンゲージメントはスポーツブックと同水準で推移している。

同社は、9月と10月におけるブローカー、取引所、マーケットメイク業務を通じた取引テイクレートが約11.1%だったと発表した。ドラフトキングスが総売上高の約3分の2を獲得し、残りを第三者マーケットメーカーが受け取った。

10月の年換算消費者取引高は101億ドルに達し、7月の水準の約3倍となった。年換算の総取引高は7月の5倍以上となる568億ドルに拡大した。10月の消費者取引高の27%をコンボ取引が占め、同月中に70%超の顧客がコンボ取引を行った。

予測事業の顧客の20%近くがスポーツ以外の市場で取引を行った。暗号資産はここ数週間で総消費者取引高の2桁近いシェアに迫った。経営陣は、翌月にかけてCryptoMarketsのDKXへの移行を目指していると述べた。

2026年度の予測事業の売上高は、新規顧客向けプロモーションが総売上高の大半を相殺するため軽微にとどまる見込み。それでも経営陣は、2026年の顧客コホートが年換算で約3億5000万ドルの売上総利益を計上するペースにあり、約20カ月で投資回収できる見通しであると説明した。

スポーツブック

スポーツブックの純売上高は、取扱高の12%増と純売上高マージンの6.4%への拡大に支えられ、前年同期比36%増となった。ドラフトキングスのホールドレートは11%を超え、パーレイ比率も上昇が続いた。

経営陣は、スポーツブックを展開する各州における取扱高シェアおよび総ゲーミング収益シェアが4四半期連続で前年同期比で改善したと述べた。また、予測市場オペレーターによる同社スポーツブック事業への目立った影響は見られないと表明した。

iGaming

ドラフトキングスはiGamingの新規顧客獲得数を前年同期比76%増加させた。総売上高は7%増となったものの、新規顧客向けプロモーション費用を負担したため、純売上高の伸びは2%にとどまった。

10月の課金アクティブ日数は前年同期比24%増加し、総売上高の伸びは12%に加速した。経営陣は、拡大した顧客コホートと製品への投資が2027年度のiGaming売上高の成長加速を後押しすると見込んでいる。

コストと営業レバレッジ

第3四半期の予測事業を除く調整後営業費用は前年同期比で減少した。経営陣は、2027年には中核事業のマーケティング支出が減少する見込みであるとし、人員を大幅に増やすことなくさらなる固定費の効率化が進むと予想している。

経営陣の業績予想（ガイダンス）

修正後の2026年度見通しは、従来の売上高65億〜69億ドル、調整後EBITDA 7億〜9億ドルから引き下げられた。経営陣はEBITDA見通し引き下げの大部分が予測事業への支出増加によるものだとしている。また、iGamingへの追加投資や、スポーツの試合結果が顧客有利に振れたことも要因として挙げた。

2027年度の売上高は中間値で前年比17%増となる見込み。経営陣は、スポーツブックの着実な成長、iGamingの成長加速、および営業レバレッジの恩恵を中核事業が享受すると予想しており、中核事業の調整後EBITDAマージンは約360ベーシスポイント拡大して約18%に達すると見込んでいる。

ドラフトキングスは、予測事業が2028年には調整後EBITDAの追い風になると見込んでいる。また、予測事業への投資を経た後でも2027年には大幅な余剰フリーキャッシュフローが生み出され、2028年には予測事業そのものがフリーキャッシュフローを創出すると予想している。

リスクと注視すべき分野

• 規制および法的な不確実性：ドラフトキングスは州レベルの動向、訴訟手続き、およびスポーツイベント契約の規制状況を注視している。経営陣の基本シナリオのモデルでは2028年半ばの連邦最高裁判決を想定しているが、時期や判決内容は依然として不透明である。
• スポーツ契約の喪失リスク：経営陣は、スポーツ予測契約が2028年7月に終了する弱気シナリオをモデル化した。その時点までに2026年コホートの投資は完全に回収され、2027年コホートも50%以上回収されると見込んでいる。さらに、クロスセルや非スポーツ商品を通じて4年以内に全額回収を達成できる可能性があるとしている。
• 目先の多額の投資負担：予測事業への支出は2026年度に6億5000万〜7億ドルに達し、2027年度も2億5000万〜3億5000万ドルにとどまると見込まれ、連結調整後EBITDAの大きな重荷となる。
• プロモーション負担の増大：2026年度は新規顧客向けプロモーションが予測事業の総売上高の大半を相殺する見通しである。また、プロモーションにより新規顧客獲得が好調だったにもかかわらず、iGamingの純売上高の伸びが抑制された。
• スポーツの試合結果：経営陣は、2026年度の中核事業のEBITDA見通し下方修正額のうち、約60%は試合結果が顧客有利に振れたことを反映したものだと説明した。

アナリスト質疑応答の要点

アナリストからは、予測事業の顧客経済性が規制リスクに見合うものかどうかに質問が集中した。経営陣は、2026年コホートは約20カ月で投資回収できる見込みだと回答した。2028年7月にスポーツ契約が終了するシナリオの下でも、非スポーツの予測や「Pick 6」、宝くじなど他商品へのクロスセルに支えられ、2027年コホートは4年以内に投資回収できる見通しだという。

顧客獲得コストについて、経営陣は、短期的なアクティブユーザー数の増加ではなくコホートごとのリターンに基づいて支出を判断していると説明した。予測事業の追加マーケティングの大半は地域別に行われ、オンラインスポーツブックの新規立ち上げと同様の手法で、魅力的なリターンを生み出す州に重点的に投じられた。

経営陣は、規制面で大きな好転が見られない限り、2027年度の予測事業支出が現在の予算枠を超える可能性は低いとの認識を示した。規制面で悪化があれば、ドラフトキングスは投資を縮小する可能性がある。なお、売上高見通しには製品改良や獲得効率の向上による追加の収益化は織り込まれていない。

iGamingについて、経営陣はプロモーションの増加は低価値顧客へのシフトではなく、想定を上回る顧客獲得を主に反映したものであると述べた。ドラフトキングスは、初期プロモーション費用が一巡した後は、これらのコホートが売上高および調整後EBITDAに貢献すると見込んでいる。

2028年に向けて、経営陣はスポーツ予測が通年で提供され続けた場合、2026年と2027年の予測事業コホートが10億ドル超の売上総利益を生み出す可能性があると試算した。スポーツ予測が終了した場合、ドラフトキングスはマーケティングを大幅に縮小する一方で、他商品へクロスセルされた顧客からの売上総利益を維持できると見込んでいる。

決算説明会トランスクリプト全文

---

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, everyone. Thank you for joining us, and welcome to the DraftKings Third Quarter 2026 Earnings Call. I will now hand the conference over to [ Matt Rapaport ], Vice President of Finance. Please go ahead.

Unknown Executive

Good morning, everyone, and thank you for joining us today. Certain statements we make during this call may constitute forward-looking statements that are subject to risks, uncertainties and other factors as discussed further in our SEC filings that could cause our actual results to differ materially from our historical results or forecast. We assume no responsibility to update forward-looking statements other than as required by law.

During this call, management will also discuss certain non-GAAP financial measures that we believe may be useful in evaluating DraftKings' operating performance. These measures should not be considered in isolation or as a substitute for DraftKings' financial results prepared in accordance with GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release, slide presentation and business update, which can be found on our website and in our quarterly report on Form Q filed with the SEC.

Hosting the call today, we have Jason Robins, Chief Executive Officer and Co-Founder of DraftKings, who will share some opening remarks and an update on our business. Following Jason's remarks, our Chief Financial Officer, Alan Ellingson, will provide a review of our financials. We will then open the line to questions. I will now turn the call over to Jason Robins.

Jason Robins

Thank you, Matt. Good morning, everyone, and thank you all for joining. We had a pivotal third quarter. We have been rapidly building our predictions offering to capture the significant opportunity we are seeing, and this quarter, that showed up in our results. More than 1.6 million customers have now engaged with our predictions offering year-to-date, which is already powering growth across the business.

In the third quarter, monthly unique payers increased 13% year-over-year and sports consumer volume increased 22% year-over-year, driving total revenue growth of 16% year-over-year. Due to the compelling data and excellent returns we are seeing year-to-date, we have increased our 2026 adjusted EBITDA investment in predictions to $650 million to $700 million. Our predictions customers are highly engaged, retaining at high levels and trading significant volume. In totality, we expect our 2026 cohort to pay back in approximately 20 months, well below our 2-year payback target.

When we combine the ramp in our predictions business with our strong core business, we believe we are set up for an exceptional 2027, we expect total revenue to grow 17% at the midpoint of our guidance, boosted by predictions revenue of $700 million at the midpoint.

Predictions customers we are acquiring today should begin contributing meaningful gross profit going into next year and we expect the adjusted EBITDA investment in predictions to step down to $300 million at the midpoint. In the core, we expect adjusted EBITDA to growth of $1.2 billion at the midpoint, powered by steady Sportsbook growth accelerating iGaming growth from this year's investments and strong operating leverage.

At the midpoint, adjusted EBITDA margin in the core business expands approximately 370 basis points in 2026 and another approximately 360 basis points in 2027 to approximately 18%, and we are focused on continuing that expansion. Altogether, we expect fiscal year 2027 adjusted EBITDA of $800 million to $1 billion.

Let me start with Predictions and why we are investing more. Across our business, we follow the data and underwrite to strict payback periods and we lean in when we see strong returns. Our 2026 predictions cohort is outperforming the 2-year paybacks we targeted in this already run rating to approximately $350 million of annualized gross profit. We are seeing retention engagement of newly acquired predictions customers in line with Sportsbook levels.

Additionally, we are observing attractive take rates of approximately 11.1% and on trades on [ DKX ] across brokerage exchange and market making in September and October. We captured approximately 2/3 of that gross revenue with third-party market makers capture the rest.

The results have been remarkable. In just a few months, we have become the clear #3 predictions exchanged by total volume. In October, annualized consumer volume reached $10.1 billion up nearly 3x from July, and annualized total volume traded reached $56.8 billion, up over 5x from July as combos grow as a share of our volume.

The growth of our Predictions offering has followed the same playbook that made our Sportsbook offering #1 in the industry and easy-to-use interface powered by vertically integrated technology and our proprietary trading and sports data infrastructure.

Our sports predictions offering is now best-in-class anchored by a content library that is unmatched in the space. This translates to the depth of our customer experience. at [ DKX ] list more than 3x as many game level markets as our nearest competitor across our largest sports, including the NFL, NBA and college football.

Customers are responding to that depth, with combos reaching 27% of consumer volume in October and more than 70% of our customers trading combos in the month. Vertical integration is one of our key differentiators. We own the brokerage, the exchange and the market maker, which lets us control our offering road map, innovate faster and capture more of the economics across the stack.

It also strengthens the quality of our revenue, a substantial and growing portion of our predictions gross revenue now comes from maker and take or fees, a low volatility, high gross margin revenue stream.

We are also increasingly excited about the emerging nonsports opportunity. Nearly 20% of our predictions customers have already traded nonsports markets. and non-sports consumer volume for customers on par with sports consumer volume per customer to date.

Crypto is leading the way, approaching double-digit share of total consumer volume in recent weeks, and we expect it to grow as we migrate [ CryptoMarkets DKX ] which we are targeting to do over the next month.

We are investing with discipline and our balance sheet is strong. We have maintained our cash position at approximately $1.1 billion through this investment cycle. We expect to generate significant excess free cash flow in 2027, even after funding our predictions investment, and we expect predictions itself to generate free cash flow in 2028.

Our returns are attractive across a wide range of outcomes in part because we are driving strong cross-sell into our other offerings, such as pick, lottery and nonsports predictions. Even if sports contracts were to end in July 2028, we estimate our 2026 cohort will be fully paid back by that date. By then, our 2027 cohort would be more than 50% paid back and we'd expect that cohort to fully pay back within 4 years without sports contracts.

Our recent performance reinforces our belief that we are in a win-win position no matter how any future court ruling plays out.

Now turning to the core business. Sportsbook net revenue grew 36% year-over-year in the third quarter, with net revenue margin expanding approximately 120 basis points to 6.4%. Handle growth was also strong at 12% and would likely have been even higher if not for the significant increase in sportsbook net revenue margin.

The World Cup provided a boost, which was fully offset by 1 fewer week of college football and NFL, the 12% growth number is a true like-for-like comparison. We continue to see healthy handle on revenue growth, further substantiating our view that prediction market operators are having no discernible impact on our Sportsbook business.

Our Sportsbook coal rate eclipsed 11%, and our parlay mix continues to grow rapidly, increasing 300 basis points year-over-year. For the fourth consecutive quarter, our handle share across sportsbook states improved year-over-year, and our GGR share also increased year-over-year.

In the third quarter, iGaming customer acquisition grew 76% year-over-year and gross revenue growth accelerated to 7% year-over-year, while net revenue grew 2% as we invest in promotions to welcome those new customers. That growth reflects a deliberate multi-quarter plan to accelerate our iGaming business.

We revamped our already top-rated offering, debuted exclusive content such as the Casino franchise and introduced new rewards and merchandising. Seeing strong early returns, we stepped up this effort in the third quarter and fourth quarter to date, investing incrementally in marketing and new customer promotions. The trends are encouraging. Underlying engagement is strong, October paid active days were active customers multiplied by days engaged on the app grew 24% year-over-year, and October gross revenue growth accelerated to 12%. As a result, we expect these investments to accelerate iGaming revenue growth in fiscal year 2027.

We also remain firmly focused on managing our cost structure. In the third quarter, adjusted operating expense declined year-over-year, excluding predictions. In 2027, we expect significant operating leverage in our core business driven by national marketing efficiencies as states mature and cost programs designed to optimize how we work. We have never had more ways to win. Super App brings Sportsbook predictions, iGaming and more together for customers across the country. We will continue to strengthen that advantage as we build out our offering and optimize our marketing and cross-sell.

With the NFL and NBA seasons and full swing in the holiday temp poles ahead, we expect the fourth quarter to set us up to enter 2027 with strong momentum. As we look ahead, we will continue to be disciplined and data-driven in how we deploy our capital to maximize long-term shareholder returns.

With that, I will turn it over to Alan Ellingson, our Chief Financial Officer.

Alan Ellingson

Thank you, Jason. I'll hit the financial highlights, including our third quarter performance and our fiscal year 2026 and 2027 guide. Please note that all income statement measures discussed except for revenue, are on a non-GAAP adjusted EBITDA basis.

As Jason mentioned, total revenue increased 16% year-over-year in the third quarter to $1.33 billion, driven by continued healthy customer engagement and higher Sportsbook net revenue margin. Monthly unique payers or MUPs, increased 13% year-over-year to $4.1 million and average revenue per month increased 3% year-over-year to $109. This top line strength was driven by robust demand across our offerings. [ Sports ] consumer volumes increased 22% year-over-year Sportsbook net revenue grew 36% year-over-year on 12% handle growth, approximately 120 basis points of net revenue margin expansion to 6.4%, even as our parlay mix increased 300 basis points year-over-year.

In iGaming, customer acquisition grew 76% year-over-year and gross revenue grew 7% year-over-year, while net revenue grew 2% as we invested in promotions to welcome these new customers.

We also continue to operate with discipline on the cost side. As Jason mentioned, adjusted operating expense, excluding predictions, declined year-over-year in the third quarter. I want to reiterate that we will remain focused on improving the efficiency of our cost structure which should continue to drive margin expansion in our core business in 2027. Third quarter adjusted EBITDA was negative $317 million, primarily reflecting the increased investment in predictions.

Now we'll touch on our fiscal year 2026 and 2027 guidance. Last quarter, we communicated fiscal year 2026 guidance of $6.5 billion to $6.9 billion in revenue and $700 million to $900 million in adjusted EBITDA, with our core business on track to generate approximately $1 billion of adjusted EBITDA.

Today, we are updating our fiscal year 2026 guidance to $6.35 billion to $6.55 billion in revenue, and $175 million to $275 million in adjusted EBITDA, primarily reflecting our increased adjusted EBITDA investment in predictions of $650 million to $700 million.

We expect adjusted EBITDA from the core business of $875 million to $925 million, which reflects our decision to invest further in iGaming growth as well as the impact of modestly customer-friendly sport outcomes.

We expect adjusted EBITDA investments in predictions of $175 million to $225 million in the fourth quarter, and Predictions revenue will be immaterial in fiscal year 2026 as new customer promotions will offset the lion's share of the gross revenue generated.

For fiscal year 2027, we are introducing revenue guidance of $7.35 billion to $7.75 billion, an increase of 17% year-over-year at the midpoint and adjusted EBITDA guidance of $800 million to $1 billion.

We expect revenue from the core business of $6.7 billion to $7 billion, up 4% to 9% year-over-year compared to the midpoint of fiscal year 2026 guidance. and adjusted EBITDA from the core business of $1.15 billion to $1.25 billion or $1.2 billion at the midpoint in 2027.

Our core business is strong, powered by steady sportsbook growth, accelerating iGaming growth and significant operating leverage. That takes adjusted EBITDA margin in the core business to approximately 18% in 2027 and up approximately 360 basis points from this year at the midpoint of guidance.

We expect predation revenues of $650 million to $750 million and adjusted EBITDA investments in predictions of $250 million to $350 million stepping down to $300 million at the midpoint as the customers we acquired this year contribute meaningful gross profit.

We will continue to monitor regulatory developments related to sports predictions and we'll adjust our level of predictions investments accordingly. Regardless, we expect predictions to be a tailwind to adjusted EBITDA in 2028.

As always, we remain disciplined in how we allocate capital. Our core business continues to generate significant free cash flow which we are deploying to fund growth in our predictions business at attractive payback periods. We have maintained our cash position at approximately $1.1 billion through the investment cycle, and we expect to generate significant excess free cash flows in 2027, even after funding our prediction investments. That concludes our remarks, and we will now open the line for questions.

Operator

[Operator Instructions] Your first question comes from the line of Julie Hoover from Bank of America.

質疑応答

Julie Hoover

Jason, can you just walk us through the decision to increase our core production spend in 2027 relative to 2026? And how are you thinking about justifying LTVs when there's a material risk of sports event contracts going away in 2028?

Jason Robins

Great question. So we included some pages in the earnings presentation, which I would definitely encourage you and everyone to review basically showing the payback period.

So first starting with 2026, we are going to get paybacks, we believe, in about 20 months base case forecast is a midyear 2028 Supreme Court ruling. So we should have those customers fully paid back by then. Obviously, there's a chance that could accelerate, and we weighed that. But even in that case, we'll have very attractive paybacks there.

In the 2027 cohort, we modeled out is also having very similar paybacks probably better in the event that it's positive Supreme Court ruling or it gets delayed even further. But even if there is a ruling that shuts down sports predictions in July of 2028, we still think that cohort should pay back in 4 years or less. And that's because of the excellent cross-sell we're seeing on to other products we have, including the non-sports prediction.

So really feel like that was a good justification. Obviously, we typically target 3-year paybacks in our core business. So it's a little bit longer than that, but that's in the case where sports contracts go away in the case where they don't it's much faster than our core business. So kind of middle of the road will be in line with where our core business payback targets are.

Operator

Your next question comes from the line of Stephen Grambling from Morgan Stanley. Please go ahead.

Stephen Grambling

Jason, I think one of the big questions that have been facing the whole industry is whether competition is driving up both cost to maintain and if customer acquisition costs are rising. Just looking at the recent quarter, whether sequentially or year-over-year, it looks like the increase in actives is most similar to the third quarter of '24, yet marketing per active is up materially versus that period. So how should investors reconcile those numbers versus the commentary on paybacks and the core margins?

Jason Robins

Yes. I think the way you have to look at is really an acquisition point of view. So obviously, we had a lot of states that for the very first time, we were able to offer an NFL product for sports predictions. And we didn't know how that was going to perform. We've seen obviously varying performance levels based on different states launching in OSB, more recent states have ramped faster, earlier states ramp slower. We weren't sure where on the curve that would be.

But much like every new state story, we spend the levels that get us some of the best paybacks that we're ever going to see in those early days of a launch. So it really is the time to invest.

Obviously, there's the whole wrinkle here of the Supreme Court, and we weighed that in, and that's why we targeted shorter payback periods and we modeled out what happens if the court does rule negatively and how do we look at the payback periods in those scenarios. But really felt like there was a justification to even spend more than we did if we didn't feel like we were already at a point that we were getting saturation.

So really, I think it was based on pure data. If you look back to 2024, where you said Q4, I think, or Q3, I can't remember, this is our best acquisition quarter since then, too. So really, I think that you have to kind of look at it from the perspective acquisition to payback period and less sort of in quarter, what do the active counts look like.

Operator

Your next question comes from the line of David Katz from Jefferies.

David Katz

Thanks for the commentary so far. I just want to sort of go down this road that I think you've started with the prior questions, right? It sounds, Jason, as though you're sort of looking at the future predictions in a relatively binary way, meaning Supreme Court yes, Supreme Court no. Is there contemplation for some middle ground outcomes where this is still a business, but in some fashion, it's less economically compelling as one of those binary outcomes suggests, right? Like is that somewhere on the decision tree also? And how does that economically turn out?

Jason Robins

Yes. I think you're bringing up a great point. There's obviously more than one, two outcomes that you could see. There is a middle of the road outcome where maybe some of the sports contracts out there are no longer available, others are I think that would be a better case in terms of payback.

So the reason we kind of looked at the two outcomes we said, there's the status quo today. If everything sort of stays as is, what does that look like? What do we think these returns will look like? And then we took what we think is the most draconian-likely scenario. Obviously, there's always even worse scenarios like all of event contracts, including financial markets go away. But I think if you look at the most likely of those scenarios, the probably most severe would be all sports contracts go away.

So if that's the case, then what does the paybacks look like. So that's why we looked at those two, sort of like two ends of the spectrum. There's obviously a lot of in between things that could happen. There's delays that could drag it out and make litigation take longer. That would obviously extend out an end decision, which is a different set of math, too.

So those were all things that we weighed in, but we want to feel good that even in the case that probably the most significant rollback of all sports contracts that was likely an outcome. We want to feel good that even in that case, we were getting paybacks that were acceptable to us.

Operator

Your next question comes from the line of Eric Sheridan from Goldman Sachs.

Eric Sheridan

Sorry to keep pulling on the thread on the sweater here on this. But maybe to think through another one of the probabilistic outcomes because obviously, as you said, Slide 12 is sort of binary.

How are you thinking through the elements of what might happen to the core business as an output of all of the input costs and marketing spend behind predictions in an end state where predictions went away? And how much of a return profile should we be thinking about that coming or flowing back into the core business as something that might be the remainder consumer option come 2028. Just trying to think through all the various different outcomes here.

Jason Robins

Sorry, I asked one more time. Can you repeat that?

Eric Sheridan

Curious about the halo effect or residual effect of the investments you would make behind a dual go-to-market approach if one of those go-to-market approaches fell away because of the regulatory landscape whether some of that effect of impacting customers or building your brand would come back to the core.

Jason Robins

I see. I do think that's a good point. There's obviously a halo effect for national spend. Very much though the spend that we incrementally did in predictions was local spend in states that we were seeing great returns in. And I do think there, there's a benefit because we do have other products in many of those states. From Pick 6 to nonsports predictions to lottery to daily fantasy sports. So we do have other products that we are able to engage customers on. We're seeing very strong cross-sell onto many of those products.

So really, I do think there is a halo effect in terms of the ongoing LTV of those customers. But in terms of the brand halo and states that have OSB and iGaming, it really probably had a minimal impact, if any, at all because the vast majority of the incremental spend was done at a local level.

Operator

Your next question comes from the line of Dan Politzer from JPMorgan. .

Daniel Politzer

I have a question on the core business, the flow through. I think in 2026 and 2027 is about 70% to 75% Obviously, that's quite a bit higher than where you've been. I recognize there's some OpEx efficiency there. But can you just talk through the marketing, G&A and product and technology spend for the core business and what that looks like this year and next year and maybe put some numbers around it?

Jason Robins

Yes. So overall, next year, marketing spend for the entire business is coming down. That is despite the fact that we are actually increasing predictions a little bit. So core marketing spend is coming down.

We have also seen quite a bit of efficiency on the fixed cost side. As you probably noticed, we've seen really good fixed cost this year, and I think that will continue into next year. And we have many initiatives lined up to continue to focus on cost all the way up and down the P&L. So I do think there's a lot of cost leverage there, and it's a huge focus of the business right now. We're very much focused on how we can continue to make our cost structure as efficient and lean as possible, both in terms of fixed cost, but also how we think about the entire P&L and every dollar we spend.

Operator

The next question comes from the line of Trey Bowers from Wells Fargo.

Raymond Bowers

I think one thing that would be helpful is just a little bit of a better understanding of the PM level promotional component of the customer acquisition costs. Can you guys just give a sense in the numbers you provided us of what the kind of GGR to MGR bridge looks like this year and next? Just some feel for what kind of GGR levels we're talking about here.

And then I guess Part 2 of that would be just a better sense, you mentioned a lot of local kind of spend on customer acquisition that shows up more as an OpEx item. Could you just give a little more clarity of what that is? Is that lead gen? Is that more targeted kind of social media type advertising. I think we just love a little bit better feel for where all these dollars are going.

Jason Robins

Yes. I mean, on the latter, it's very much similar to how we would do an OSB state launch. We obviously spent at much lower levels because if you would add up what we would have spent on an OSB state launch in all of these large states that would have been higher. But it's the same type of approach, obviously, focusing on the most efficient channels since we don't spend as deeply or didn't spend as deeply as we were for an OSB launch.

On your first question, so to put -- give you some perspective, we will do hundreds of millions of gross revenue in predictions this year. and net revenue is pretty close to neutral. And that is almost entirely -- 90% of that is due to customer -- new customer promotions. So next year, you're really going to see an inflection and obviously, we're going to be acquiring a lot of new customers next year, too. So the gross revenue is even higher. But despite that, we're expecting net revenue of around $700 million next year and gross profit of around $0.5 billion, which I think is a pretty strong ramp considering this is our first year to be able to get there, and we'll be ahead of that, obviously, on the gross revenue side.

All those numbers, too, are based on where we're currently rerating. We are not assuming that we get additional monetization from product improvements or we get any more efficiency on customer acquisition than what we're seeing today. we are assuming status quo.

The reality is that's probably not the case. If I look back at OSB and iGaming 4 or 5 years ago. That was a period where it was so new, and we were still making so many improvements on the product and figuring out so many things on the marketing side that we were just seeing continual benefit to that. So obviously, to build any of that into the guide. We're only looking at what we're running at now. But I do think it is more likely than not that we'll find some wins next year that could give us some upside on the Predictions numbers.

So I'm really bullish about that part of the business. I know everyone's a little surprised at how much we spent, and I wish you all could see every data point that we see. But I feel like that is a really strong story, and it's going to be a really big number for us next year.

And all of that, I think, if you compare it to, we invested around $650 million to $700 million this year, we're going to do that much in just revenue alone, $500 million in gross profit alone next year. So really a great ramp on predictions, I think.

And the core business is doing extremely well also. If you look at the core business, we are on track other than basically outcomes. We did invest a little bit more on some iGaming marketing, which is also going to give us some benefit next year. We took up our iGaming numbers from what we had previously thought for 2027. But that was a minor part.

Other than outcomes, we are pretty much on track for what we thought the core would be. And I will say we did all of this without any major increase in fixed costs. We invested a little more in predictions, but we've been able to do all of this, including building out an unbelievable product for predictions with mostly the same head count that we have today. And I think that speaks to a lot of the efficiency we're seeing from AI and other sorts of things that we've been able to do.

Operator

Your next question comes from the line of Barry Jonas from Truist Securities.

Barry Jonas

You recently exited the Utah market for sports and some other prediction markets. How should we think about risk for further exits? At what point would that impact your guidance? And I guess, complicating that is this new CFTC guidance around operating in each state. So curious if you can share any thoughts there, too.

Jason Robins

Yes. I mean, obviously, we're always monitoring anything on the state regulatory side. We've managed to stay completely out of the litigation everywhere. And I generally think that most states are waiting to see what the courts decide before taking more severe action, but you never know, we'll have to see. But obviously, this is all going to play out in the courts at some point. So one way or another, it's going to resolve and there will be clarity.

As far as the CFTC thing, I wouldn't make anything of that. There's I don't think that's going to affect anything for us. There's a process for demonstrating why you can only operate in certain geographies. So we've had a really good relationship with the CFTC, and I think that will be something that we can work through with them easily.

Operator

Your next question comes from the line of Brandt Montour from Barclays.

I will move to the next analyst. Please rejoin the queue if you would like to ask a question. Your next question comes from the line of Robin Farley from UBS.

Robin Farley

Great I have kind of a big picture question for Jason, but also just wondering if Alan can clarify that the predictor market losses specifically in Q3? I know you guided to it for Q4, but I don't think we have the number for Q3.

My question is looking at the scenario, when you talk about if it stopped in the middle of 2028, it would only be a 4-year payback period. That would assume that you get a year of the shorter payback period. So it looks like kind of non-sports have maybe a 6-year payback period and maybe not an investment you would make just in nonsports.

I guess -- why the need to be in this business if it's allowed to continue that would probably lead more states to legalize OSB. So you'd get that business anyway, right? Like you can see clearly that players prefer traditional OSB to prediction markets. So if prediction markets stick around and it leads states to legalize OSB, you get that business anyway without this sort of $1 billion of losses between this year and next year.

So why I guess, why do you -- why the need to be in the prediction market business -- is it actually -- like in those two scenarios, if it stays or if it goes, it seems like the non-sports is not a payback period you'd want to be in. And the sports, if it is allowed, you get that business anyway through your OSB business.

Jason Robins

Well, let me start with the sports piece. I don't think we can count on every state suddenly legalizing sports betting. I think it could happen. It could also be states just take a while or don't do anything at all or decide to tax prediction. So this is something that's obviously addressing an audience that is very much our brand and our core audience.

And I think it's important strategically for us and also could be a huge financial opportunity. So I don't view it as something that we can just count on the state all legalized sports betting, and we'll get that business anyway. Even though I do agree with you that we are seeing that the sports betting product is a better product and will attract customers and retain customers better.

As far as the nonsports beats goes, I think it's so early days for that, but what I will say is we put basically no effort into it, and it's already approaching 10% of our sports volume. So I'm pretty excited about that. We did not want to model [indiscernible], we're counting on this thing. It's not even something that we focus any attention on. It's roughly 10% of our volume. We're counting on that. to grow 3, 4x or 5x in order to pay back. We didn't feel like that was necessary since we were getting 4-year paybacks anyway.

And I'll remind you, it's not just the nonsports Pick 6 and other products, too, that we're seeing cross-sell on. But I actually think there's a ton of upside from nonsports. I think nonsports could be 25%, 30%, maybe even more of the size that sports is today. So we'll have more to say on that once we've had time to focus a little attention and see what we can do from a product standpoint.

But to me, that's sort of a hidden gem there that might be -- honestly, it wasn't what I was thinking when we got into it. I was thinking we have to defend our turf and win this market on forth. But now that we've seen some early signal, I'm actually pretty excited about the nonsports piece, and I think we'll have more to say about that in the coming quarters.

Operator

Your next question comes from the line of Jed Kelly from Oppenheimer.

Jed Kelly

Great. Just going back on the core, it does seem next year you are harvesting some margin, although you do have some competitors still spending aggressively in those markets.

So how do you -- how should we know you're kind of not too focused on prediction markets and not taking the eye off the ball in the core segment? And you're okay and pulling back on this investment, you won't lose significant share in sports in core.

Jason Robins

Yes, I don't think we're pulling back at all. We have hundreds of millions of promo cushions still built into next year in order to make sure that we have ammo if we find things that are worth investing in. So I don't think we're pulling back.

And if you look at our performance, we were basically tied with [ Vanda ] for #1 in the industry on sports betting this quarter. So I think the fact that we've been doing so well, we've actually been able to have strong share performance, iGaming share. We've gained now for 3 consecutive quarters. all while making the headway we made in predictions. I mean that really, to me, is a great story.

How many companies are able to do that to really maintain the level of performance that we have and even grow our share in the core business while also rapidly creating the best sports product in the market and becoming a quick #3 exchange in a nascent market that nobody thought we could compete in this quickly.

So to me, it feels like an amazing amount of just stellar execution by our team. And I don't think we're giving up an inch anywhere. We are laser focused on the core.

Operator

Your next question comes from the line of Brandt Montour from Barclays.

Brandt Montour

Sorry about before. Can you hear me now?

Jason Robins

Yes.

Brandt Montour

Okay. Great. So I want to talk about iGaming. Your acquisitions were up 76% year-over-year, which is really obviously compelling growth number. I'm trying to reconcile that against the plus 7% GGR accelerated 12% GGR. I know this is comparing apples and oranges, but has with this reacceleration of iGaming investment, are you changing your strategy toward lower average value players? How is retention looking anything around that to help us understand strategy, just given you're investing more into a market that some of your peers have described as moving through the maturity curve here?

Jason Robins

Yes. I wouldn't say that we're investing that much more. I mean, really, the bulk of the investment came from just higher-than-expected new customer and new customer promos, which in past years, we have been following a little while I've seen when new customers perform ahead of what you expect, do you have more new customer promo, which in a given quarter will drive a little bit of bottom line softness, but ultimately leads to much better revenue and EBITDA in future quarters. So I think that's what you're seeing here.

We had a very strong quarter, as you noted, 76% year-over-year growth in customer acquisition. We were not expecting to do that well. As a result, we were able to confidently increase our outlook for not just the rest of this year, but also going into 2027 for iGaming. So that is part of why we think we're going to do so well on the core next year is we're not -- again, we're not assuming iGaming accelerates any further from here. We're just kind of taking what we're run rating at, but I do think if you continue to see this type of acquisition performance, that's also something that could be a tailwind for a full year 2027, and we'll be able to realize the benefits of those cohorts throughout the year and not just have that short-term hit.

Operator

Our next question comes from the line of Jordan Bender from Citizens.

Jordan Bender

Thanks for the question. So clearly, we're seeing another wave of spending here across sports betting and iGaming industry, which tells us there's always more to be spent in this space.

So the thing that we and investors kind of always weigh here is EBITDA at the bottom here. So is the investment number that you guys put out for the prediction market spend for next year, kind of that absolute maximum you think you would take to achieve everything that you want to get done.

Jason Robins

I would be surprised if we spend more in terms of total investment next year on Predictions. We have a pretty healthy marketing budget in there. So I don't think that we will.

Obviously, we'll see what happens with the courts if there is some kind of early positive signals, and that's something we'd have to weigh. And if there's an early negative signal, we might actually pull back on some of that investment. So that's something we'll be closely monitoring and plotting into our different scenarios.

But I think based on sort of the baseline expectation, we feel pretty good about the budget for next year. This year going in, we really didn't know. I mean this is a brand-new category. We're like it's just going to ramp more like sports betting business -- excuse me, that we would launch now. Is it going to look more like an early state that has slower ramp, somewhere in between. Now we actually have really good data to be able to say this is the appropriate level of spend.

We also before, did not have any data on what these customers rate spend levels would look like an NFL got a little bit of World Cup data, but World Cup is a tough comp because we don't have a ton of sports betting data from World Cup either. So really getting some NFL data now and being able to compare and contrast the customers we're seeing. And use the historical support setting data that we had to be able to say, this is what we think these customers will form at has given us a lot more conviction that we know the right level of spend.

So a long way of saying, I don't think we will spend more barring any major regulatory developments positive, and I don't think we will probably spend too much less either barring any major regulatory developments to the negative.

I do think that there is top line upside, though, because as I noted earlier, we didn't build in any kind of additional benefits from all the product work and other things that we're going to be doing to optimize the engine next year. So that's what I feel really good about.

On the core side, we've been able to grow adjusted EBITDA consistently every year. We're up again this year. It's been somewhere $200 million, $300 million of incremental adjusted EBITDA every year to the core and next year will be the same. So we feel very good about the trajectory there. We are getting lots of operating leverage in that business. And it's following the playbook that we thought it would a few years ago when we laid out how states once they kind of go past that initial investment phase just really inflect in terms of profitability because you get the benefit of continued revenue growth along with declining marketing costs and also declining operating leverage from not having to increase fixed costs either.

Operator

Your next question comes from the line of Clark Lampen from BTIG.

William Lampen

Maybe following on Jordan's question here. If we assume that $1 billion combined, I guess, in sort of EBITDA losses between '26 and '27, is the right level of investment, and there's sort of no fungibility.

One of the things that I think we haven't touched on that might be helpful as we think about the future value of that is where the investment is actually taking place.

The comments that you made earlier on products suggest the majority of this investment should be sports-focused customer acquisition, if that's right. Is it broad-based across your non-OSB states right now? Is it concentrated in certain markets where you see a clear pathway to legalization in the next few years?

And as we're thinking about this sort of national component, maybe this is for Alan, how does that sort of break down? Or how could that be ascribed the Core versus Predictions?

Jason Robins

So I mean those are great questions. I think, first, the way that we are thinking about the states is purely on a return basis. However, following some of the election results earlier this week, we do think there are certain states that may have a clear path to legalization now.

So we will weigh whether we want to differentially spend in those states relative to some others but it has been very much treating all the states on the same basis in terms of expected returns and looking at the actual sports predictions revenue stream, not layering in any likelihood of legalization, which arguably is conservative because hopefully, we will get some legalization. So there could be some upside there, too.

That's something else, by the way, when you think about the 4-year payback that we modeled on next year's cohort, that is not assuming any benefit from state legalization that is only with the products that we have today, minus sports predictions. So you're right, there is some upside there. And I do think that's going to weigh in and how we allocate our local spend.

But the vast majority of the incremental is local spend. We are allocating some of our national predictions as well. But where we are incrementally spending is mostly on the local side. We obviously are spending some more on the national side, too, but the majority of it is local.

William Lampen

Am I -- is that -- sorry, I just want to make sure that I caught that right. You're saying the majority of the national is being allocated, I guess, sort of local and for core right now.

Jason Robins

Well, the way -- I mean, this is a little bit in the weeds, but essentially, we are saying there is certain direct spend in local markets that is going to prediction states that is obviously getting 100% allocated to predictions. There is some local spend in sports betting state that's going 100% of sports betting. Then there's some national advertising that is advertising sports betting that is mostly getting allocated to sports betting and then some that is advertising a more broad sports offering that's getting allocated between the two.

Operator

Your next question comes from the line of Ben Chaiken from Mizuho.

Benjamin Chaiken

Maybe back to iGaming, I think it was to Brandt's question. I think there was an implied cut, if I'm not mistaken, in the '26 numbers, of around $100 million to $150 million. It sounds like some of that hold on the OSB side, so that's iGaming as you alluded to, Jason.

Can you help us just better understand the moving parts and then your return expectations or goals for iGaming? And then how did you think about the iGaming contribution in '27 in your guide? Obviously, you're annualizing a few new regions, I think you get main, et cetera.

Jason Robins

Yes. So Maine is small. So it's not really a needle mover next year, but we are obviously layering in the additional customer acquisition that we're seeing in iGaming into next year's guide. So we feel like we've found some insights and some efficiencies in marketing that have allowed us to unlock better customer acquisition without having to increase spend as much.

And so I do think that will give us a tailwind and drive revenue growth next year. And then I'm sorry, what was the first part of your question?

Benjamin Chaiken

I was just maybe looking for some clarity on the -- I think the underlying '26 has an EBITDA cut some...

Jason Robins

Yes. So most of that, about 60% of that is sport outcomes. And the remainder is new customer acquisition in iGaming. So that's how I think about it.

Benjamin Chaiken

And I guess are you judging kind of the return on that? Is it if you guys are accelerating share? Or what's the what's kind of your going...

Jason Robins

We're accelerating share. But really, what we're looking at is just more customers coming in at more efficient tax. So with that, you're going to get higher new customer promotion just from raw customer accounts. And so that's the bulk of it. There is some additional marketing spend too, but it's really mostly the new customer promotion. .

So that's going to pay off just by having more customers next year and also through the remainder of this year once they work through those promotions. But that's something we have much kind of historical data. I mean these are not like new things. This is just more volume of the same thing we've been seeing for years. So we have a very good understanding of how those cohorts will model out.

Operator

Your final question will come from the line of James Hardiman from Citi.

James Hardiman

Thanks for fitting in. So really appreciate the clear framework for 2026 and 2027 prediction investment. Obviously, given where we are a lot less visibility on 2028. Other than to say that prediction becomes an EBITDA tailwind. So maybe how should investors be thinking about 2028. Is that the beginning of a harvest phase with meaningfully lower acquisition spend. Is that EBITDA tailwind, more function of higher revenues? Or will we see lower investment than 2027? And how are you thinking about sort of your penetration of that prediction TAM as you exit 2027?

Jason Robins

Yes, it's a great question. So if you look at this year, the cohorts that we acquired are going to generate about $350 million of gross profit next year. and we're going to acquire even more players next year than we are acquiring this year.

So all in, we're going to be generating quite a bit of gross profit from the '26 and '27 cohort probably somewhere north of $1 billion in 2028, were we to see sports predictions stick around for the whole year. So a lot of it is coming from that.

Obviously, as the market matures, we're going to optimize our customer acquisition spend, too. So that will probably come down a little bit. But even if it stayed flat year-over-year, we'll be generating significant free cash flow through that.

The other scenario, of course, is sports predictions goes away, in which case we would significantly dial back the marketing and we would still be generating gross profit from the customers that we acquired on these other products that we've been able to cross-sell them too, including nonsports, fix, lottery and so on.

So that's really the way to think about that is that just on the harvest period, but also really very little investment -- sorry, excuse me, the latter becomes a harvest period, but in the former, we will probably continue to invest at some level just like we do in online sports betting and iGaming.

Operator

We have reached the end of the Q&A session. I will now turn the call back to Jason Robins for closing remarks.

Jason Robins

Thank you all for joining us on today's call. We are excited and well positioned for our success in the future. Thank you for your continued support and look forward to seeing you all next quarter.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.